Correlation Between Smallcap Fund and Ab Sustainable

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

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

Diversification Opportunities for Smallcap Fund and Ab Sustainable

0.73

Correlation Coefficient

Smallcap Fund  Ab Sustainable

Poor diversification

The 3 months correlation between Smallcap and AWPZX is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Fund Fka and Ab Sustainable International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Sustainable Inter and Smallcap Fund 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 Smallcap Fund Fka 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 Inter has no effect on the direction of Smallcap Fund i.e., Smallcap Fund and Ab Sustainable go up and down completely randomly.

Pair Corralation between Smallcap Fund and Ab Sustainable

Assuming the 90 days horizon Smallcap Fund Fka is expected to generate 1.49 times more return on investment than Ab Sustainable. However, Smallcap Fund is 1.49 times more volatile than Ab Sustainable International. It trades about 0.19 of its potential returns per unit of risk. Ab Sustainable International is currently generating about 0.09 per unit of risk. If you would invest  2,465  in Smallcap Fund Fka on May 17, 2025 and sell it today you would earn a total of  272.00  from holding Smallcap Fund Fka or generate 11.03% return on investment over 90 days.

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

Smallcap Fund Fka  vs.  Ab Sustainable International

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 14 (%) 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.

Ab Sustainable Inter

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Sustainable International are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ab Sustainable is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Smallcap Fund and Ab Sustainable

The main advantage of trading using opposite Smallcap Fund and Ab Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Fund 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 Smallcap Fund Fka and Ab Sustainable International 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.