Correlation Between Ab Centrated and Disciplined Growth

Can any of the company-specific risk be diversified away by investing in both Ab Centrated and Disciplined Growth at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ab Centrated and Disciplined Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Centrated Growth and Disciplined Growth Fund, you can compare the effects of market volatilities on Ab Centrated and Disciplined Growth and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ab Centrated with a short position of Disciplined Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Centrated and Disciplined Growth.

Diversification Opportunities for Ab Centrated and Disciplined Growth

-0.37

Correlation Coefficient

Ab Centrated  Disciplined Growth

Very good diversification

The 3 months correlation between WPSKX and Disciplined is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ab Centrated Growth and Disciplined Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Disciplined Growth and Ab Centrated is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ab Centrated Growth are associated (or correlated) with Disciplined Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Disciplined Growth has no effect on the direction of Ab Centrated i.e., Ab Centrated and Disciplined Growth go up and down completely randomly.

Pair Corralation between Ab Centrated and Disciplined Growth

Assuming the 90 days horizon Ab Centrated Growth is expected to generate 0.43 times more return on investment than Disciplined Growth. However, Ab Centrated Growth is 2.31 times less risky than Disciplined Growth. It trades about 0.07 of its potential returns per unit of risk. Disciplined Growth Fund is currently generating about 0.03 per unit of risk. If you would invest  4,465  in Ab Centrated Growth on October 9, 2024 and sell it today you would earn a total of  989.00  from holding Ab Centrated Growth or generate 22.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	70.51%
Values	Daily Returns

Ab Centrated Growth  vs.  Disciplined Growth Fund

Ab Centrated Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Centrated Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Ab Centrated is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Disciplined Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Disciplined Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Ab Centrated and Disciplined Growth

The main advantage of trading using opposite Ab Centrated and Disciplined Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Centrated position performs unexpectedly, Disciplined Growth can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Disciplined Growth will offset losses from the drop in Disciplined Growth's long position.

The idea behind Ab Centrated Growth and Disciplined Growth Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.