Correlation Between Ab Global and Hussman Strategic

Can any of the company-specific risk be diversified away by investing in both Ab Global and Hussman Strategic 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 Global and Hussman Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Global Real and Hussman Strategic Total, you can compare the effects of market volatilities on Ab Global and Hussman Strategic 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 Global with a short position of Hussman Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Hussman Strategic.

Diversification Opportunities for Ab Global and Hussman Strategic

0.54

Correlation Coefficient

Ab Global  Hussman Strategic

Very weak diversification

The 3 months correlation between AEEIX and Hussman is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Real and Hussman Strategic Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hussman Strategic Total and Ab Global 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 Global Real are associated (or correlated) with Hussman Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hussman Strategic Total has no effect on the direction of Ab Global i.e., Ab Global and Hussman Strategic go up and down completely randomly.

Pair Corralation between Ab Global and Hussman Strategic

Assuming the 90 days horizon Ab Global Real is expected to under-perform the Hussman Strategic. In addition to that, Ab Global is 1.96 times more volatile than Hussman Strategic Total. It trades about -0.11 of its total potential returns per unit of risk. Hussman Strategic Total is currently generating about 0.0 per unit of volatility. If you would invest  1,463  in Hussman Strategic Total on September 12, 2024 and sell it today you would earn a total of  1.00  from holding Hussman Strategic Total or generate 0.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ab Global Real  vs.  Hussman Strategic Total

Ab Global Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Global Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Ab Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hussman Strategic Total

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Hussman Strategic Total has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hussman Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Global and Hussman Strategic

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

The idea behind Ab Global Real and Hussman Strategic Total 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.