Correlation Between Ab Select and Manning Napier

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

By analyzing existing cross correlation between Ab Select Equity and Manning Napier Pro Blend, you can compare the effects of market volatilities on Ab Select and Manning Napier 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 Select with a short position of Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Manning Napier.

Diversification Opportunities for Ab Select and Manning Napier

-0.42

Correlation Coefficient

Ab Select  Manning Napier

Very good diversification

The 3 months correlation between AUUIX and Manning is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Manning Napier Pro Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Pro and Ab Select 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 Select Equity are associated (or correlated) with Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier Pro has no effect on the direction of Ab Select i.e., Ab Select and Manning Napier go up and down completely randomly.

Pair Corralation between Ab Select and Manning Napier

Assuming the 90 days horizon Ab Select Equity is expected to generate 2.88 times more return on investment than Manning Napier. However, Ab Select is 2.88 times more volatile than Manning Napier Pro Blend. It trades about 0.21 of its potential returns per unit of risk. Manning Napier Pro Blend is currently generating about 0.02 per unit of risk. If you would invest  2,204  in Ab Select Equity on September 5, 2024 and sell it today you would earn a total of  207.00  from holding Ab Select Equity or generate 9.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Ab Select Equity  vs.  Manning Napier Pro Blend

Ab Select Equity

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Select Equity are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Ab Select may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Manning Napier Pro

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Manning Napier Pro Blend are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Manning Napier 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 Select and Manning Napier

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

The idea behind Ab Select Equity and Manning Napier Pro Blend 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.