Correlation Between Ab Small and Ab Emerging
Can any of the company-specific risk be diversified away by investing in both Ab Small and Ab Emerging 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 Ab Emerging 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 Ab Emerging Markets, you can compare the effects of market volatilities on Ab Small and Ab Emerging 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 Ab Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Ab Emerging.
Diversification Opportunities for Ab Small and Ab Emerging
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SCAVX and ABCEX is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Ab Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Emerging Markets 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 Ab Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Emerging Markets has no effect on the direction of Ab Small i.e., Ab Small and Ab Emerging go up and down completely randomly.
Pair Corralation between Ab Small and Ab Emerging
Assuming the 90 days horizon Ab Small is expected to generate 1.25 times less return on investment than Ab Emerging. In addition to that, Ab Small is 1.89 times more volatile than Ab Emerging Markets. It trades about 0.04 of its total potential returns per unit of risk. Ab Emerging Markets is currently generating about 0.09 per unit of volatility. If you would invest 689.00 in Ab Emerging Markets on June 3, 2025 and sell it today you would earn a total of 266.00 from holding Ab Emerging Markets or generate 38.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Ab Emerging Markets
Performance |
| Timeline |
| Ab Small Cap |
| Ab Emerging Markets |
Ab Small and Ab Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Ab Emerging
The main advantage of trading using opposite Ab Small and Ab Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Ab Emerging 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 Emerging will offset losses from the drop in Ab Emerging's long position.| Ab Small vs. Ab Discovery Growth | Ab Small vs. Ab International Value | Ab Small vs. Small Cap Core | Ab Small vs. Ab International Growth |
| Ab Emerging vs. Fidelity Managed Retirement | Ab Emerging vs. Multimanager Lifestyle Moderate | Ab Emerging vs. Mfs Lifetime Retirement | Ab Emerging vs. Franklin Lifesmart Retirement |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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