Correlation Between Ab Large and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Ab Large and Emerging Markets 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 Large and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Large Cap and Emerging Markets Portfolio, you can compare the effects of market volatilities on Ab Large and Emerging Markets 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 Large with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Large and Emerging Markets.
Diversification Opportunities for Ab Large and Emerging Markets
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between APGCX and Emerging is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ab Large Cap and Emerging Markets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Por and Ab Large 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 Large Cap are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Por has no effect on the direction of Ab Large i.e., Ab Large and Emerging Markets go up and down completely randomly.
Pair Corralation between Ab Large and Emerging Markets
Assuming the 90 days horizon Ab Large Cap is expected to generate 0.94 times more return on investment than Emerging Markets. However, Ab Large Cap is 1.06 times less risky than Emerging Markets. It trades about 0.26 of its potential returns per unit of risk. Emerging Markets Portfolio is currently generating about 0.23 per unit of risk. If you would invest 6,093 in Ab Large Cap on April 8, 2025 and sell it today you would earn a total of 261.00 from holding Ab Large Cap or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Large Cap vs. Emerging Markets Portfolio
Performance |
| Timeline |
| Ab Large Cap |
| Emerging Markets Por |
Ab Large and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Large and Emerging Markets
The main advantage of trading using opposite Ab Large and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Large position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Ab Large vs. Gmo Global Equity | Ab Large vs. Morningstar International Equity | Ab Large vs. Ab Equity Income | Ab Large vs. T Rowe Price |
| Emerging Markets vs. Astor Longshort Fund | Emerging Markets vs. T Rowe Price | Emerging Markets vs. Ab Select Longshort | Emerging Markets vs. Touchstone Ultra Short |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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