Correlation Between Ab Impact and Destinations Municipal
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Destinations 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 Destinations 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 Destinations Municipal Fixed, you can compare the effects of market volatilities on Ab Impact and Destinations 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 Destinations Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Destinations Municipal.
Diversification Opportunities for Ab Impact and Destinations Municipal
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ABIMX and Destinations is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Destinations Municipal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destinations Municipal 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 Destinations Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destinations Municipal has no effect on the direction of Ab Impact i.e., Ab Impact and Destinations Municipal go up and down completely randomly.
Pair Corralation between Ab Impact and Destinations Municipal
Assuming the 90 days horizon Ab Impact Municipal is expected to generate 1.92 times more return on investment than Destinations Municipal. However, Ab Impact is 1.92 times more volatile than Destinations Municipal Fixed. It trades about 0.08 of its potential returns per unit of risk. Destinations Municipal Fixed is currently generating about 0.08 per unit of risk. If you would invest 914.00 in Ab Impact Municipal on September 12, 2024 and sell it today you would earn a total of 85.00 from holding Ab Impact Municipal or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Ab Impact Municipal vs. Destinations Municipal Fixed
Performance |
| Timeline |
| Ab Impact Municipal |
| Destinations Municipal |
Ab Impact and Destinations Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Destinations Municipal
The main advantage of trading using opposite Ab Impact and Destinations Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Destinations 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 Destinations Municipal will offset losses from the drop in Destinations Municipal's long position.| Ab Impact vs. SCOR PK | Ab Impact vs. Morningstar Unconstrained Allocation | Ab Impact vs. Thrivent High Yield | Ab Impact vs. Via Renewables |
| Destinations Municipal vs. Dreyfus Government Cash | Destinations Municipal vs. Elfun Government Money | Destinations Municipal vs. Dws Government Money | Destinations Municipal vs. Aig Government Money |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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