Correlation Between 1nvest High and Abax Balanced

Can any of the company-specific risk be diversified away by investing in both 1nvest High and Abax Balanced 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 1nvest High and Abax Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1nvest High Equity and Abax Balanced Prescient, you can compare the effects of market volatilities on 1nvest High and Abax Balanced 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 1nvest High with a short position of Abax Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1nvest High and Abax Balanced.

Diversification Opportunities for 1nvest High and Abax Balanced

0.79

Correlation Coefficient

1nvest High  Abax Balanced

Poor diversification

The 3 months correlation between 1nvest and Abax is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding 1nvest High Equity and Abax Balanced Prescient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abax Balanced Prescient and 1nvest High 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 1nvest High Equity are associated (or correlated) with Abax Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abax Balanced Prescient has no effect on the direction of 1nvest High i.e., 1nvest High and Abax Balanced go up and down completely randomly.

Pair Corralation between 1nvest High and Abax Balanced

Assuming the 90 days trading horizon 1nvest High is expected to generate 1.77 times less return on investment than Abax Balanced. But when comparing it to its historical volatility, 1nvest High Equity is 1.13 times less risky than Abax Balanced. It trades about 0.15 of its potential returns per unit of risk. Abax Balanced Prescient is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  270.00  in Abax Balanced Prescient on September 13, 2024 and sell it today you would earn a total of  20.00  from holding Abax Balanced Prescient or generate 7.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.65%
Values	Daily Returns

1nvest High Equity  vs.  Abax Balanced Prescient

1nvest High Equity

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 1nvest High Equity are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, 1nvest High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Abax Balanced Prescient

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Abax Balanced Prescient are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Abax Balanced may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with 1nvest High and Abax Balanced

The main advantage of trading using opposite 1nvest High and Abax Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1nvest High position performs unexpectedly, Abax Balanced 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 Abax Balanced will offset losses from the drop in Abax Balanced's long position.

The idea behind 1nvest High Equity and Abax Balanced Prescient pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.