Correlation Between Ab Value and Fabwx
Can any of the company-specific risk be diversified away by investing in both Ab Value and Fabwx 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 Value and Fabwx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Value Fund and Fabwx, you can compare the effects of market volatilities on Ab Value and Fabwx 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 Value with a short position of Fabwx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Fabwx.
Diversification Opportunities for Ab Value and Fabwx
Almost no diversification
The 3 months correlation between ABVCX and Fabwx is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and Fabwx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabwx and Ab Value 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 Value Fund are associated (or correlated) with Fabwx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabwx has no effect on the direction of Ab Value i.e., Ab Value and Fabwx go up and down completely randomly.
Pair Corralation between Ab Value and Fabwx
Assuming the 90 days horizon Ab Value is expected to generate 1.19 times less return on investment than Fabwx. But when comparing it to its historical volatility, Ab Value Fund is 1.22 times less risky than Fabwx. It trades about 0.12 of its potential returns per unit of risk. Fabwx is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,681 in Fabwx on September 5, 2025 and sell it today you would earn a total of 101.00 from holding Fabwx or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Value Fund vs. Fabwx
Performance |
| Timeline |
| Ab Value Fund |
| Fabwx |
Ab Value and Fabwx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Value and Fabwx
The main advantage of trading using opposite Ab Value and Fabwx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Value position performs unexpectedly, Fabwx 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 Fabwx will offset losses from the drop in Fabwx's long position.| Ab Value vs. Eagle Growth Income | Ab Value vs. Pace Large Growth | Ab Value vs. Timothy Largemip Cap Growth | Ab Value vs. Qs Growth Fund |
| Fabwx vs. Eaton Vance Diversified | Fabwx vs. Columbia Diversified Equity | Fabwx vs. Massmutual Premier Diversified | Fabwx vs. Massmutual Premier Diversified |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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