Correlation Between Ab Large and First Foundation
Can any of the company-specific risk be diversified away by investing in both Ab Large and First Foundation 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 Large and First Foundation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Large Cap and First Foundation Fixed, you can compare the effects of market volatilities on Ab Large and First Foundation 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 Large with a short position of First Foundation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Large and First Foundation.
Diversification Opportunities for Ab Large and First Foundation
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ABPRX and First is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ab Large Cap and First Foundation Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Foundation Fixed and Ab Large 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 Large Cap are associated (or correlated) with First Foundation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Foundation Fixed has no effect on the direction of Ab Large i.e., Ab Large and First Foundation go up and down completely randomly.
Pair Corralation between Ab Large and First Foundation
Assuming the 90 days horizon Ab Large Cap is expected to generate 1.22 times more return on investment than First Foundation. However, Ab Large is 1.22 times more volatile than First Foundation Fixed. It trades about 0.2 of its potential returns per unit of risk. First Foundation Fixed is currently generating about 0.12 per unit of risk. If you would invest 8,120 in Ab Large Cap on April 25, 2025 and sell it today you would earn a total of 36.00 from holding Ab Large Cap or generate 0.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 11.48% |
Values | Daily Returns |
Ab Large Cap vs. First Foundation Fixed
Performance |
Timeline |
Ab Large Cap |
Risk-Adjusted Performance
Good
Weak | Strong |
First Foundation Fixed |
Ab Large and First Foundation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Large and First Foundation
The main advantage of trading using opposite Ab Large and First Foundation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Large position performs unexpectedly, First Foundation 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 First Foundation will offset losses from the drop in First Foundation's long position.Ab Large vs. Qs Growth Fund | Ab Large vs. L Abbett Growth | Ab Large vs. Buffalo Growth Fund | Ab Large vs. Qs Moderate Growth |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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