Correlation Between Ab Sustainable and Smallcap Fund

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

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

Diversification Opportunities for Ab Sustainable and Smallcap Fund

0.94

Correlation Coefficient

Ab Sustainable  Smallcap Fund

Almost no diversification

The 3 months correlation between ATECX and Smallcap is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ab Sustainable Global and Smallcap Fund Fka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Fund Fka and Ab Sustainable 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 Sustainable Global are associated (or correlated) with Smallcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Fund Fka has no effect on the direction of Ab Sustainable i.e., Ab Sustainable and Smallcap Fund go up and down completely randomly.

Pair Corralation between Ab Sustainable and Smallcap Fund

Assuming the 90 days horizon Ab Sustainable is expected to generate 1.31 times less return on investment than Smallcap Fund. But when comparing it to its historical volatility, Ab Sustainable Global is 1.32 times less risky than Smallcap Fund. It trades about 0.16 of its potential returns per unit of risk. Smallcap Fund Fka is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,381  in Smallcap Fund Fka on May 8, 2025 and sell it today you would earn a total of  226.00  from holding Smallcap Fund Fka or generate 9.49% return on investment over 90 days.

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

Ab Sustainable Global  vs.  Smallcap Fund Fka

Ab Sustainable Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Sustainable Global are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Ab Sustainable may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Smallcap Fund Fka

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap Fund Fka are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly abnormal primary indicators, Smallcap Fund may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Ab Sustainable and Smallcap Fund

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

The idea behind Ab Sustainable Global and Smallcap Fund Fka 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.