Correlation Between Ab Global and Growth Strategy

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

By analyzing existing cross correlation between Ab Global Risk and Growth Strategy Fund, you can compare the effects of market volatilities on Ab Global and Growth Strategy 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 Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Growth Strategy.

Diversification Opportunities for Ab Global and Growth Strategy

0.05

Correlation Coefficient

Ab Global  Growth Strategy

Significant diversification

The 3 months correlation between CBSYX and Growth is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Risk are associated (or correlated) with Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Ab Global i.e., Ab Global and Growth Strategy go up and down completely randomly.

Pair Corralation between Ab Global and Growth Strategy

Assuming the 90 days horizon Ab Global is expected to generate 7.24 times less return on investment than Growth Strategy. In addition to that, Ab Global is 1.62 times more volatile than Growth Strategy Fund. It trades about 0.01 of its total potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.15 per unit of volatility. If you would invest  999.00  in Growth Strategy Fund on September 17, 2024 and sell it today you would earn a total of  301.00  from holding Growth Strategy Fund or generate 30.13% return on investment over 90 days.

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

Ab Global Risk  vs.  Growth Strategy Fund

Ab Global Risk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Global Risk has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Growth Strategy

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Growth Strategy Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Growth Strategy 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 Growth Strategy

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

The idea behind Ab Global Risk and Growth Strategy Fund 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.