Correlation Between Ab International and Federated Prudent
Can any of the company-specific risk be diversified away by investing in both Ab International and Federated Prudent 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 International and Federated Prudent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab International Growth and Federated Prudent Bear, you can compare the effects of market volatilities on Ab International and Federated Prudent 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 International with a short position of Federated Prudent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab International and Federated Prudent.
Diversification Opportunities for Ab International and Federated Prudent
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AWPIX and Federated is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ab International Growth and Federated Prudent Bear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Prudent Bear and Ab International 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 International Growth are associated (or correlated) with Federated Prudent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Prudent Bear has no effect on the direction of Ab International i.e., Ab International and Federated Prudent go up and down completely randomly.
Pair Corralation between Ab International and Federated Prudent
Assuming the 90 days horizon Ab International Growth is expected to generate 0.76 times more return on investment than Federated Prudent. However, Ab International Growth is 1.32 times less risky than Federated Prudent. It trades about 0.15 of its potential returns per unit of risk. Federated Prudent Bear is currently generating about -0.07 per unit of risk. If you would invest 1,957 in Ab International Growth on March 30, 2025 and sell it today you would earn a total of 256.00 from holding Ab International Growth or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab International Growth vs. Federated Prudent Bear
Performance |
| Timeline |
| Ab International Growth |
| Federated Prudent Bear |
Ab International and Federated Prudent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab International and Federated Prudent
The main advantage of trading using opposite Ab International and Federated Prudent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab International position performs unexpectedly, Federated Prudent 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 Federated Prudent will offset losses from the drop in Federated Prudent's long position.| Ab International vs. Pace Municipal Fixed | Ab International vs. Gurtin California Muni | Ab International vs. Alpine Ultra Short | Ab International vs. Us Government Securities |
| Federated Prudent vs. Retirement Living Through | Federated Prudent vs. Mfs Lifetime Retirement | Federated Prudent vs. Putnman Retirement Ready | Federated Prudent vs. Target Retirement 2040 |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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