Correlation Between Ab Sustainable and Pace Large

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

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

Diversification Opportunities for Ab Sustainable and Pace Large

0.95

Correlation Coefficient

Ab Sustainable  Pace Large

Almost no diversification

The 3 months correlation between SUTAX and Pace is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ab Sustainable Thematic and Pace Large Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Large Growth and Ab Sustainable 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 Sustainable Thematic are associated (or correlated) with Pace Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Large Growth has no effect on the direction of Ab Sustainable i.e., Ab Sustainable and Pace Large go up and down completely randomly.

Pair Corralation between Ab Sustainable and Pace Large

Assuming the 90 days horizon Ab Sustainable is expected to generate 1.23 times less return on investment than Pace Large. In addition to that, Ab Sustainable is 1.03 times more volatile than Pace Large Growth. It trades about 0.14 of its total potential returns per unit of risk. Pace Large Growth is currently generating about 0.17 per unit of volatility. If you would invest  1,528  in Pace Large Growth on May 20, 2025 and sell it today you would earn a total of  121.00  from holding Pace Large Growth or generate 7.92% return on investment over 90 days.

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

Ab Sustainable Thematic  vs.  Pace Large Growth

Ab Sustainable Thematic

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Sustainable Thematic are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ab Sustainable may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pace Large Growth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pace Large Growth are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Pace Large may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Ab Sustainable and Pace Large

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

The idea behind Ab Sustainable Thematic and Pace Large 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.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.