Correlation Between Ab All and Ab Global

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Can any of the company-specific risk be diversified away by investing in both Ab All and Ab Global 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 All and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab All Market and Ab Global E, you can compare the effects of market volatilities on Ab All and Ab Global 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 All with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab All and Ab Global.

Diversification Opportunities for Ab All and Ab Global

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between AMTOX and GCECX is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ab All Market and Ab Global E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global E and Ab All 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 All Market are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global E has no effect on the direction of Ab All i.e., Ab All and Ab Global go up and down completely randomly.

Pair Corralation between Ab All and Ab Global

Assuming the 90 days horizon Ab All is expected to generate 2.29 times less return on investment than Ab Global. But when comparing it to its historical volatility, Ab All Market is 1.81 times less risky than Ab Global. It trades about 0.18 of its potential returns per unit of risk. Ab Global E is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,782  in Ab Global E on April 9, 2025 and sell it today you would earn a total of  61.00  from holding Ab Global E or generate 3.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Ab All Market  vs.  Ab Global E

 Performance 
       Timeline  
Ab All Market 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Ab All Market are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ab All may actually be approaching a critical reversion point that can send shares even higher in August 2025.
Ab Global E 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Ab Global E are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Ab Global showed solid returns over the last few months and may actually be approaching a breakup point.

Ab All and Ab Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ab All and Ab Global

The main advantage of trading using opposite Ab All and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab All position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.
The idea behind Ab All Market and Ab Global E pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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