Correlation Between Ab Impact and Financial Services
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Financial Services 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 Financial Services 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 Financial Services Fund, you can compare the effects of market volatilities on Ab Impact and Financial Services 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 Financial Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Financial Services.
Diversification Opportunities for Ab Impact and Financial Services
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between ABIMX and Financial is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Financial Services Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Services 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 Financial Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Services has no effect on the direction of Ab Impact i.e., Ab Impact and Financial Services go up and down completely randomly.
Pair Corralation between Ab Impact and Financial Services
Assuming the 90 days horizon Ab Impact Municipal is expected to generate 0.25 times more return on investment than Financial Services. However, Ab Impact Municipal is 4.08 times less risky than Financial Services. It trades about 0.44 of its potential returns per unit of risk. Financial Services Fund is currently generating about -0.04 per unit of risk. If you would invest 985.00 in Ab Impact Municipal on September 12, 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 Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Impact Municipal vs. Financial Services Fund
Performance |
| Timeline |
| Ab Impact Municipal |
| Financial Services |
Ab Impact and Financial Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Financial Services
The main advantage of trading using opposite Ab Impact and Financial Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Financial Services 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 Financial Services will offset losses from the drop in Financial Services' long position.| Ab Impact vs. SCOR PK | Ab Impact vs. Morningstar Unconstrained Allocation | Ab Impact vs. Thrivent High Yield | Ab Impact vs. Via Renewables |
| Financial Services vs. Pax High Yield | Financial Services vs. Prudential High Yield | Financial Services vs. Guggenheim High Yield | Financial Services vs. City National Rochdale |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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