Correlation Between Ab Impact and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Floating Rate 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 Floating Rate 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 Floating Rate Fund, you can compare the effects of market volatilities on Ab Impact and Floating Rate 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 Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Floating Rate.
Diversification Opportunities for Ab Impact and Floating Rate
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABIMX and Floating is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate 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 Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Ab Impact i.e., Ab Impact and Floating Rate go up and down completely randomly.
Pair Corralation between Ab Impact and Floating Rate
Assuming the 90 days horizon Ab Impact Municipal is expected to under-perform the Floating Rate. In addition to that, Ab Impact is 2.39 times more volatile than Floating Rate Fund. It trades about -0.04 of its total potential returns per unit of risk. Floating Rate Fund is currently generating about 0.27 per unit of volatility. If you would invest 804.00 in Floating Rate Fund on August 25, 2024 and sell it today you would earn a total of 14.00 from holding Floating Rate Fund or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Impact Municipal vs. Floating Rate Fund
Performance |
| Timeline |
| Ab Impact Municipal |
| Floating Rate |
Ab Impact and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Floating Rate
The main advantage of trading using opposite Ab Impact and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.| Ab Impact vs. Queens Road Small | Ab Impact vs. Palm Valley Capital | Ab Impact vs. Fidelity Small Cap | Ab Impact vs. Heartland Value Plus |
| Floating Rate vs. Ab Impact Municipal | Floating Rate vs. Dws Government Money | Floating Rate vs. Counterpoint Tactical Municipal | Floating Rate vs. The National Tax Free |
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 CEOs Directory module to screen CEOs from public companies around the world.
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