Correlation Between Ab Bond and Sit Emerging
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Sit 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 Bond and Sit Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Sit Emerging Markets, you can compare the effects of market volatilities on Ab Bond and Sit 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 Bond with a short position of Sit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Sit Emerging.
Diversification Opportunities for Ab Bond and Sit Emerging
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ANBIX and Sit is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Sit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Emerging Markets and Ab Bond 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 Bond Inflation are associated (or correlated) with Sit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Emerging Markets has no effect on the direction of Ab Bond i.e., Ab Bond and Sit Emerging go up and down completely randomly.
Pair Corralation between Ab Bond and Sit Emerging
Assuming the 90 days horizon Ab Bond is expected to generate 1.95 times less return on investment than Sit Emerging. But when comparing it to its historical volatility, Ab Bond Inflation is 1.54 times less risky than Sit Emerging. It trades about 0.1 of its potential returns per unit of risk. Sit Emerging Markets is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 876.00 in Sit Emerging Markets on September 10, 2024 and sell it today you would earn a total of 5.00 from holding Sit Emerging Markets or generate 0.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ab Bond Inflation vs. Sit Emerging Markets
Performance |
Timeline |
Ab Bond Inflation |
Sit Emerging Markets |
Ab Bond and Sit Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Bond and Sit Emerging
The main advantage of trading using opposite Ab Bond and Sit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Sit 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 Sit Emerging will offset losses from the drop in Sit Emerging's long position.Ab Bond vs. Transamerica Asset Allocation | Ab Bond vs. Goldman Sachs Short Term | Ab Bond vs. Praxis Genesis Servative | Ab Bond vs. Legg Mason Bw |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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