Correlation Between Ab Bond and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Emerging Markets 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 Bond and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Emerging Markets Portfolio, you can compare the effects of market volatilities on Ab Bond and Emerging Markets 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 Bond with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Emerging Markets.
Diversification Opportunities for Ab Bond and Emerging Markets
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABNOX and Emerging is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Emerging Markets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Por and Ab Bond 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 Bond Inflation are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Por has no effect on the direction of Ab Bond i.e., Ab Bond and Emerging Markets go up and down completely randomly.
Pair Corralation between Ab Bond and Emerging Markets
Assuming the 90 days horizon Ab Bond is expected to generate 12.72 times less return on investment than Emerging Markets. But when comparing it to its historical volatility, Ab Bond Inflation is 4.39 times less risky than Emerging Markets. It trades about 0.08 of its potential returns per unit of risk. Emerging Markets Portfolio is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,821 in Emerging Markets Portfolio on April 30, 2025 and sell it today you would earn a total of 330.00 from holding Emerging Markets Portfolio or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. Emerging Markets Portfolio
Performance |
| Timeline |
| Ab Bond Inflation |
| Emerging Markets Por |
Ab Bond and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Emerging Markets
The main advantage of trading using opposite Ab Bond and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Ab Bond vs. Madison Diversified Income | Ab Bond vs. Jpmorgan Diversified Fund | Ab Bond vs. American Funds Conservative | Ab Bond vs. Conservative Balanced Allocation |
| Emerging Markets vs. Pnc International Equity | Emerging Markets vs. Touchstone International Equity | Emerging Markets vs. T Rowe Price | Emerging Markets vs. Jhancock Global Equity |
Check out your portfolio center.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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |