Correlation Between Ab Impact and Ishares Municipal
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Ishares Municipal 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 Impact and Ishares Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Impact Municipal and Ishares Municipal Bond, you can compare the effects of market volatilities on Ab Impact and Ishares Municipal 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 Impact with a short position of Ishares Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Ishares Municipal.
Diversification Opportunities for Ab Impact and Ishares Municipal
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between ABIMX and Ishares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Ishares Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Municipal Bond and Ab Impact 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 Impact Municipal are associated (or correlated) with Ishares Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Municipal Bond has no effect on the direction of Ab Impact i.e., Ab Impact and Ishares Municipal go up and down completely randomly.
Pair Corralation between Ab Impact and Ishares Municipal
Assuming the 90 days horizon Ab Impact Municipal is expected to generate 1.26 times more return on investment than Ishares Municipal. However, Ab Impact is 1.26 times more volatile than Ishares Municipal Bond. It trades about 0.06 of its potential returns per unit of risk. Ishares Municipal Bond is currently generating about 0.04 per unit of risk. If you would invest 982.00 in Ab Impact Municipal on August 28, 2024 and sell it today you would earn a total of 11.00 from holding Ab Impact Municipal or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Impact Municipal vs. Ishares Municipal Bond
Performance |
| Timeline |
| Ab Impact Municipal |
| Ishares Municipal Bond |
Ab Impact and Ishares Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Ishares Municipal
The main advantage of trading using opposite Ab Impact and Ishares Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Ishares Municipal 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 Ishares Municipal will offset losses from the drop in Ishares Municipal's long position.| Ab Impact vs. Transamerica Emerging Markets | Ab Impact vs. Pnc Emerging Markets | Ab Impact vs. Rbc Bluebay Emerging | Ab Impact vs. Ashmore Emerging Markets |
| Ishares Municipal vs. Champlain Small | Ishares Municipal vs. Small Pany Growth | Ishares Municipal vs. Touchstone Small Cap | Ishares Municipal vs. Ab Small Cap |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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