Correlation Between Ab Impact and Federated Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Federated Pennsylvania 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 Federated Pennsylvania 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 Federated Pennsylvania Municipal, you can compare the effects of market volatilities on Ab Impact and Federated Pennsylvania 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 Federated Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Federated Pennsylvania.
Diversification Opportunities for Ab Impact and Federated Pennsylvania
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ABIMX and FEDERATED is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Federated Pennsylvania Municip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Pennsylvania 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 Federated Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Pennsylvania has no effect on the direction of Ab Impact i.e., Ab Impact and Federated Pennsylvania go up and down completely randomly.
Pair Corralation between Ab Impact and Federated Pennsylvania
Assuming the 90 days horizon Ab Impact Municipal is expected to generate 1.32 times more return on investment than Federated Pennsylvania. However, Ab Impact is 1.32 times more volatile than Federated Pennsylvania Municipal. It trades about 0.18 of its potential returns per unit of risk. Federated Pennsylvania Municipal is currently generating about 0.17 per unit of risk. If you would invest 985.00 in Ab Impact Municipal on September 3, 2024 and sell it today you would earn a total of 14.00 from holding Ab Impact Municipal or generate 1.42% 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. Federated Pennsylvania Municip
Performance |
| Timeline |
| Ab Impact Municipal |
| Federated Pennsylvania |
Ab Impact and Federated Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Federated Pennsylvania
The main advantage of trading using opposite Ab Impact and Federated Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Federated Pennsylvania 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 Federated Pennsylvania will offset losses from the drop in Federated Pennsylvania's long position.| Ab Impact vs. HUMANA INC | Ab Impact vs. Aquagold International | Ab Impact vs. Barloworld Ltd ADR | Ab Impact vs. Morningstar Unconstrained Allocation |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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