Correlation Between Ab Global and Multifactor
Can any of the company-specific risk be diversified away by investing in both Ab Global and Multifactor 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 Global and Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Risk and Multifactor Equity Fund, you can compare the effects of market volatilities on Ab Global and Multifactor 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 Global with a short position of Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Multifactor.
Diversification Opportunities for Ab Global and Multifactor
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CABIX and Multifactor is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Multifactor Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multifactor Equity and Ab Global 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 Global Risk are associated (or correlated) with Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multifactor Equity has no effect on the direction of Ab Global i.e., Ab Global and Multifactor go up and down completely randomly.
Pair Corralation between Ab Global and Multifactor
Assuming the 90 days horizon Ab Global is expected to generate 1.98 times less return on investment than Multifactor. But when comparing it to its historical volatility, Ab Global Risk is 1.68 times less risky than Multifactor. It trades about 0.17 of its potential returns per unit of risk. Multifactor Equity Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,567 in Multifactor Equity Fund on June 7, 2025 and sell it today you would earn a total of 119.00 from holding Multifactor Equity Fund or generate 7.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Multifactor Equity Fund
Performance |
| Timeline |
| Ab Global Risk |
| Multifactor Equity |
Ab Global and Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Multifactor
The main advantage of trading using opposite Ab Global and Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Multifactor 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 Multifactor will offset losses from the drop in Multifactor's long position.| Ab Global vs. First Eagle Gold | Ab Global vs. Deutsche Gold Precious | Ab Global vs. Gamco Global Gold | Ab Global vs. Invesco Gold Special |
| Multifactor vs. Qs Global Equity | Multifactor vs. Morgan Stanley Global | Multifactor vs. Templeton Global Balanced | Multifactor vs. Gamco Global Opportunity |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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