Correlation Between Ab Global and Conversus Stepstone

Can any of the company-specific risk be diversified away by investing in both Ab Global and Conversus Stepstone 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 Conversus Stepstone 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 Conversus Stepstone Private, you can compare the effects of market volatilities on Ab Global and Conversus Stepstone 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 Conversus Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Conversus Stepstone.

Diversification Opportunities for Ab Global and Conversus Stepstone

0.69

Correlation Coefficient

Ab Global  Conversus Stepstone

Poor diversification

The 3 months correlation between CABIX and Conversus is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Conversus Stepstone Private in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conversus Stepstone 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 Conversus Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conversus Stepstone has no effect on the direction of Ab Global i.e., Ab Global and Conversus Stepstone go up and down completely randomly.

Pair Corralation between Ab Global and Conversus Stepstone

Assuming the 90 days horizon Ab Global is expected to generate 1.19 times less return on investment than Conversus Stepstone. In addition to that, Ab Global is 1.95 times more volatile than Conversus Stepstone Private. It trades about 0.2 of its total potential returns per unit of risk. Conversus Stepstone Private is currently generating about 0.46 per unit of volatility. If you would invest  5,624  in Conversus Stepstone Private on May 4, 2025 and sell it today you would earn a total of  287.00  from holding Conversus Stepstone Private or generate 5.1% return on investment over 90 days.

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

Ab Global Risk  vs.  Conversus Stepstone Private

Ab Global Risk

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Global Risk are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Ab Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Conversus Stepstone

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Conversus Stepstone Private are ranked lower than 35 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Conversus Stepstone 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 Conversus Stepstone

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

The idea behind Ab Global Risk and Conversus Stepstone Private 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.