Correlation Between Ab Global and First Foundation
Can any of the company-specific risk be diversified away by investing in both Ab Global 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 Global 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 Global E and First Foundation Fixed, you can compare the effects of market volatilities on Ab Global 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 Global with a short position of First Foundation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and First Foundation.
Diversification Opportunities for Ab Global and First Foundation
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GCECX and First is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global E 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 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 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 Global i.e., Ab Global and First Foundation go up and down completely randomly.
Pair Corralation between Ab Global and First Foundation
Assuming the 90 days horizon Ab Global E is expected to generate 2.97 times more return on investment than First Foundation. However, Ab Global is 2.97 times more volatile than First Foundation Fixed. It trades about 0.25 of its potential returns per unit of risk. First Foundation Fixed is currently generating about 0.07 per unit of risk. If you would invest 1,656 in Ab Global E on April 30, 2025 and sell it today you would earn a total of 208.00 from holding Ab Global E or generate 12.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ab Global E vs. First Foundation Fixed
Performance |
Timeline |
Ab Global E |
First Foundation Fixed |
Ab Global and First Foundation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Global and First Foundation
The main advantage of trading using opposite Ab Global and First Foundation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global 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 Global vs. Semiconductor Ultrasector Profund | Ab Global vs. Qs Global Equity | Ab Global vs. Rational Strategic Allocation | Ab Global vs. Auer Growth Fund |
First Foundation vs. Shenkman Short Duration | First Foundation vs. Lord Abbett Short | First Foundation vs. Six Circles Credit | First Foundation vs. Blackrock High Yield |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |