Correlation Between Ab Centrated and Slow Capital

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

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

Diversification Opportunities for Ab Centrated and Slow Capital

0.92

Correlation Coefficient

Ab Centrated  Slow Capital

Almost no diversification

The 3 months correlation between WPASX and Slow is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ab Centrated Growth and Slow Capital Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slow Capital Growth and Ab Centrated 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 Centrated Growth are associated (or correlated) with Slow Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slow Capital Growth has no effect on the direction of Ab Centrated i.e., Ab Centrated and Slow Capital go up and down completely randomly.

Pair Corralation between Ab Centrated and Slow Capital

Assuming the 90 days horizon Ab Centrated is expected to generate 1.29 times less return on investment than Slow Capital. But when comparing it to its historical volatility, Ab Centrated Growth is 1.46 times less risky than Slow Capital. It trades about 0.76 of its potential returns per unit of risk. Slow Capital Growth is currently generating about 0.67 of returns per unit of risk over similar time horizon. If you would invest  802.00  in Slow Capital Growth on February 17, 2025 and sell it today you would earn a total of  174.00  from holding Slow Capital Growth or generate 21.7% return on investment over 90 days.

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

Ab Centrated Growth  vs.  Slow Capital Growth

Ab Centrated Growth

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Centrated Growth are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ab Centrated is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Slow Capital Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Slow Capital Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Slow Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Centrated and Slow Capital

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

The idea behind Ab Centrated Growth and Slow Capital 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.