Correlation Between Ab Global and New Perspective

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ab Global and New Perspective 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 New Perspective into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global E and New Perspective Fund, you can compare the effects of market volatilities on Ab Global and New Perspective 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 New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and New Perspective.

Diversification Opportunities for Ab Global and New Perspective

0.97
  Correlation Coefficient

Almost no diversification

The 3 months correlation between GCECX and New is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding AB GLOBAL E and NEW PERSPECTIVE FUND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective Fund 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 E are associated (or correlated) with New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective Fund has no effect on the direction of Ab Global i.e., Ab Global and New Perspective go up and down completely randomly.

Pair Corralation between Ab Global and New Perspective

Assuming the 90 days horizon Ab Global E is expected to generate 0.81 times more return on investment than New Perspective. However, Ab Global E is 1.23 times less risky than New Perspective. It trades about 0.25 of its potential returns per unit of risk. New Perspective Fund is currently generating about 0.18 per unit of risk. If you would invest  1,566  in Ab Global E on December 29, 2023 and sell it today you would earn a total of  46.00  from holding Ab Global E or generate 2.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

AB GLOBAL E  vs.  NEW PERSPECTIVE FUND

 Performance 
       Timeline  
Ab Global E 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Ab Global E are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Ab Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
New Perspective Fund 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in New Perspective Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, New Perspective may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Ab Global and New Perspective Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ab Global and New Perspective

The main advantage of trading using opposite Ab Global and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.
The idea behind Ab Global E and New Perspective 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.
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

Other Complementary Tools

Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Fundamental Analysis
View fundamental data based on most recent published financial statements
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years