Correlation Between Large-cap Growth and Ab International
Can any of the company-specific risk be diversified away by investing in both Large-cap Growth and Ab International 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 Large-cap Growth and Ab International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Large Cap Growth Profund and Ab International Growth, you can compare the effects of market volatilities on Large-cap Growth and Ab International 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 Large-cap Growth with a short position of Ab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large-cap Growth and Ab International.
Diversification Opportunities for Large-cap Growth and Ab International
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Large-cap and AWPIX is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Growth Profund and Ab International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab International Growth and Large-cap Growth 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 Large Cap Growth Profund are associated (or correlated) with Ab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab International Growth has no effect on the direction of Large-cap Growth i.e., Large-cap Growth and Ab International go up and down completely randomly.
Pair Corralation between Large-cap Growth and Ab International
Assuming the 90 days horizon Large Cap Growth Profund is expected to generate 1.09 times more return on investment than Ab International. However, Large-cap Growth is 1.09 times more volatile than Ab International Growth. It trades about 0.18 of its potential returns per unit of risk. Ab International Growth is currently generating about 0.01 per unit of risk. If you would invest 4,703 in Large Cap Growth Profund on June 7, 2025 and sell it today you would earn a total of 410.00 from holding Large Cap Growth Profund or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Large Cap Growth Profund vs. Ab International Growth
Performance |
| Timeline |
| Large Cap Growth |
| Ab International Growth |
Large-cap Growth and Ab International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Large-cap Growth and Ab International
The main advantage of trading using opposite Large-cap Growth and Ab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Large-cap Growth position performs unexpectedly, Ab International 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 International will offset losses from the drop in Ab International's long position.| Large-cap Growth vs. Advent Claymore Convertible | Large-cap Growth vs. Absolute Convertible Arbitrage | Large-cap Growth vs. Calamos Dynamic Convertible | Large-cap Growth vs. Columbia Convertible Securities |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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