Correlation Between Ab Discovery and Small Cap
Can any of the company-specific risk be diversified away by investing in both Ab Discovery and Small Cap 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 Discovery and Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Discovery Growth and Small Cap Core, you can compare the effects of market volatilities on Ab Discovery and Small Cap 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 Discovery with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Discovery and Small Cap.
Diversification Opportunities for Ab Discovery and Small Cap
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CHCIX and Small is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ab Discovery Growth and Small Cap Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Core and Ab Discovery 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 Discovery Growth are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Core has no effect on the direction of Ab Discovery i.e., Ab Discovery and Small Cap go up and down completely randomly.
Pair Corralation between Ab Discovery and Small Cap
Assuming the 90 days horizon Ab Discovery Growth is expected to generate 1.14 times more return on investment than Small Cap. However, Ab Discovery is 1.14 times more volatile than Small Cap Core. It trades about 0.21 of its potential returns per unit of risk. Small Cap Core is currently generating about 0.2 per unit of risk. If you would invest 1,022 in Ab Discovery Growth on April 6, 2025 and sell it today you would earn a total of 284.00 from holding Ab Discovery Growth or generate 27.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Discovery Growth vs. Small Cap Core
Performance |
| Timeline |
| Ab Discovery Growth |
| Small Cap Core |
Ab Discovery and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Discovery and Small Cap
The main advantage of trading using opposite Ab Discovery and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Discovery position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Ab Discovery vs. Ab Global E | Ab Discovery vs. Ab Global E | Ab Discovery vs. Ab Global E | Ab Discovery vs. Ab All Market |
| Small Cap vs. Blackrock Health Sciences | Small Cap vs. Baron Health Care | Small Cap vs. Vanguard Health Care | Small Cap vs. Alphacentric Lifesci Healthcare |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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