Correlation Between Ab Value and Defensive Market
Can any of the company-specific risk be diversified away by investing in both Ab Value and Defensive Market 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 Defensive Market 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 Defensive Market Strategies, you can compare the effects of market volatilities on Ab Value and Defensive Market 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 Defensive Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Defensive Market.
Diversification Opportunities for Ab Value and Defensive Market
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ABVCX and Defensive is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and Defensive Market Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defensive Market Str 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 Defensive Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defensive Market Str has no effect on the direction of Ab Value i.e., Ab Value and Defensive Market go up and down completely randomly.
Pair Corralation between Ab Value and Defensive Market
Assuming the 90 days horizon Ab Value Fund is expected to generate 1.73 times more return on investment than Defensive Market. However, Ab Value is 1.73 times more volatile than Defensive Market Strategies. It trades about 0.26 of its potential returns per unit of risk. Defensive Market Strategies is currently generating about 0.33 per unit of risk. If you would invest 1,645 in Ab Value Fund on April 27, 2025 and sell it today you would earn a total of 188.00 from holding Ab Value Fund or generate 11.43% 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. Defensive Market Strategies
Performance |
| Timeline |
| Ab Value Fund |
| Defensive Market Str |
Risk-Adjusted Performance
Solid
Weak | Strong |
Ab Value and Defensive Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Value and Defensive Market
The main advantage of trading using opposite Ab Value and Defensive Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Value position performs unexpectedly, Defensive Market 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 Defensive Market will offset losses from the drop in Defensive Market's long position.| Ab Value vs. Allianzgi Convertible Income | Ab Value vs. Calamos Dynamic Convertible | Ab Value vs. Fidelity Sai Convertible | Ab Value vs. Rationalpier 88 Convertible |
| Defensive Market vs. Qs Global Equity | Defensive Market vs. Calamos Global Growth | Defensive Market vs. Gmo Global Equity | Defensive Market vs. Investec Global Franchise |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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