Correlation Between Ab Small and Multi-manager Global
Can any of the company-specific risk be diversified away by investing in both Ab Small and Multi-manager Global 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 Small and Multi-manager Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Multi Manager Global Real, you can compare the effects of market volatilities on Ab Small and Multi-manager Global 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 Small with a short position of Multi-manager Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Multi-manager Global.
Diversification Opportunities for Ab Small and Multi-manager Global
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between QUAIX and Multi-manager is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Multi Manager Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager Global and Ab Small 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 Small Cap are associated (or correlated) with Multi-manager Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager Global has no effect on the direction of Ab Small i.e., Ab Small and Multi-manager Global go up and down completely randomly.
Pair Corralation between Ab Small and Multi-manager Global
Assuming the 90 days horizon Ab Small Cap is expected to generate 1.53 times more return on investment than Multi-manager Global. However, Ab Small is 1.53 times more volatile than Multi Manager Global Real. It trades about 0.12 of its potential returns per unit of risk. Multi Manager Global Real is currently generating about 0.06 per unit of risk. If you would invest 6,820 in Ab Small Cap on June 1, 2025 and sell it today you would earn a total of 580.00 from holding Ab Small Cap or generate 8.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Ab Small Cap vs. Multi Manager Global Real
Performance |
| Timeline |
| Ab Small Cap |
| Multi Manager Global |
Ab Small and Multi-manager Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Multi-manager Global
The main advantage of trading using opposite Ab Small and Multi-manager Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Multi-manager Global 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 Multi-manager Global will offset losses from the drop in Multi-manager Global's long position.| Ab Small vs. Abr 7525 Volatility | Ab Small vs. Fa 529 Aggressive | Ab Small vs. Wmcanx | Ab Small vs. Tax Managed Large Cap |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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