Correlation Between Ab High and High Income
Can any of the company-specific risk be diversified away by investing in both Ab High and High Income 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 High and High Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab High Income and High Income Fund, you can compare the effects of market volatilities on Ab High and High Income 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 High with a short position of High Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab High and High Income.
Diversification Opportunities for Ab High and High Income
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ABTHX and High is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ab High Income and High Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Income Fund and Ab High 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 High Income are associated (or correlated) with High Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Income Fund has no effect on the direction of Ab High i.e., Ab High and High Income go up and down completely randomly.
Pair Corralation between Ab High and High Income
Assuming the 90 days horizon Ab High Income is expected to under-perform the High Income. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ab High Income is 1.62 times less risky than High Income. The mutual fund trades about -0.19 of its potential returns per unit of risk. The High Income Fund is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 876.00 in High Income Fund on August 27, 2025 and sell it today you would lose (2.00) from holding High Income Fund or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab High Income vs. High Income Fund
Performance |
| Timeline |
| Ab High Income |
| High Income Fund |
Ab High and High Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab High and High Income
The main advantage of trading using opposite Ab High and High Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab High position performs unexpectedly, High Income 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 High Income will offset losses from the drop in High Income's long position.| Ab High vs. Prudential Real Estate | Ab High vs. Aew Real Estate | Ab High vs. Short Real Estate | Ab High vs. Great West Real Estate |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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