Correlation Between Qs Growth and Ab Sustainable

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

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

Diversification Opportunities for Qs Growth and Ab Sustainable

1.0

Correlation Coefficient

Qs Growth  Ab Sustainable

No risk reduction

The 3 months correlation between LANIX and SUTAX is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Qs Growth Fund and Ab Sustainable Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Sustainable Thematic and Qs Growth 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 Qs Growth Fund are associated (or correlated) with Ab Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Sustainable Thematic has no effect on the direction of Qs Growth i.e., Qs Growth and Ab Sustainable go up and down completely randomly.

Pair Corralation between Qs Growth and Ab Sustainable

Assuming the 90 days horizon Qs Growth is expected to generate 1.34 times less return on investment than Ab Sustainable. But when comparing it to its historical volatility, Qs Growth Fund is 1.31 times less risky than Ab Sustainable. It trades about 0.3 of its potential returns per unit of risk. Ab Sustainable Thematic is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  1,427  in Ab Sustainable Thematic on April 29, 2025 and sell it today you would earn a total of  237.00  from holding Ab Sustainable Thematic or generate 16.61% return on investment over 90 days.

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

Qs Growth Fund  vs.  Ab Sustainable Thematic

Qs Growth Fund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Qs Growth Fund are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Qs Growth may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Ab Sustainable Thematic

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Sustainable Thematic are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ab Sustainable showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qs Growth and Ab Sustainable

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

The idea behind Qs Growth Fund and Ab Sustainable Thematic 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.