Correlation Between Ab Value and Quantitative

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

By analyzing existing cross correlation between Ab Value Fund and Quantitative U S, you can compare the effects of market volatilities on Ab Value and Quantitative 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 Value with a short position of Quantitative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Quantitative.

Diversification Opportunities for Ab Value and Quantitative

0.93

Correlation Coefficient

Ab Value  Quantitative

Almost no diversification

The 3 months correlation between ABVCX and Quantitative is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and Quantitative U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantitative U S and Ab Value 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 Value Fund are associated (or correlated) with Quantitative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantitative U S has no effect on the direction of Ab Value i.e., Ab Value and Quantitative go up and down completely randomly.

Pair Corralation between Ab Value and Quantitative

Assuming the 90 days horizon Ab Value Fund is expected to generate 0.82 times more return on investment than Quantitative. However, Ab Value Fund is 1.22 times less risky than Quantitative. It trades about 0.11 of its potential returns per unit of risk. Quantitative U S is currently generating about 0.07 per unit of risk. If you would invest  1,726  in Ab Value Fund on May 11, 2025 and sell it today you would earn a total of  74.00  from holding Ab Value Fund or generate 4.29% return on investment over 90 days.

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

Ab Value Fund  vs.  Quantitative U S

Ab Value Fund

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Value Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Ab Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Quantitative U S

Risk-Adjusted Performance

Mild

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

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

The idea behind Ab Value Fund and Quantitative U S 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.