Correlation Between Ab High and World Energy
Can any of the company-specific risk be diversified away by investing in both Ab High and World Energy 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 World Energy 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 World Energy Fund, you can compare the effects of market volatilities on Ab High and World Energy 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 World Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab High and World Energy.
Diversification Opportunities for Ab High and World Energy
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AGDAX and World is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ab High Income and World Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Energy 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 World Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Energy has no effect on the direction of Ab High i.e., Ab High and World Energy go up and down completely randomly.
Pair Corralation between Ab High and World Energy
Assuming the 90 days horizon Ab High is expected to generate 5.1 times less return on investment than World Energy. But when comparing it to its historical volatility, Ab High Income is 5.45 times less risky than World Energy. It trades about 0.35 of its potential returns per unit of risk. World Energy Fund is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,346 in World Energy Fund on April 17, 2025 and sell it today you would earn a total of 329.00 from holding World Energy Fund or generate 24.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab High Income vs. World Energy Fund
Performance |
| Timeline |
| Ab High Income |
| World Energy |
Ab High and World Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab High and World Energy
The main advantage of trading using opposite Ab High and World Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab High position performs unexpectedly, World Energy 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 World Energy will offset losses from the drop in World Energy's long position.| Ab High vs. Needham Aggressive Growth | Ab High vs. Dunham High Yield | Ab High vs. Gmo High Yield | Ab High vs. Morningstar Aggressive Growth |
| World Energy vs. T Rowe Price | World Energy vs. T Rowe Price | World Energy vs. College Retirement Equities | World Energy vs. T Rowe Price |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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