Correlation Between Nova Fund and Ab International

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

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

Diversification Opportunities for Nova Fund and Ab International

0.6

Correlation Coefficient

Nova Fund  Ab International

Poor diversification

The 3 months correlation between Nova and AWPYX is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nova Fund Class and Ab International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab International Growth and Nova 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 Nova Fund Class are associated (or correlated) with Ab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab International Growth has no effect on the direction of Nova Fund i.e., Nova Fund and Ab International go up and down completely randomly.

Pair Corralation between Nova Fund and Ab International

Assuming the 90 days horizon Nova Fund Class is expected to generate 1.5 times more return on investment than Ab International. However, Nova Fund is 1.5 times more volatile than Ab International Growth. It trades about 0.19 of its potential returns per unit of risk. Ab International Growth is currently generating about 0.07 per unit of risk. If you would invest  13,088  in Nova Fund Class on May 17, 2025 and sell it today you would earn a total of  1,593  from holding Nova Fund Class or generate 12.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Nova Fund Class  vs.  Ab International Growth

Nova Fund Class

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nova Fund Class are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nova Fund may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Ab International Growth

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Ab International Growth are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ab International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nova Fund and Ab International

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

The idea behind Nova Fund Class and Ab International Growth 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.