Correlation Between Ab Impact and Georgia Tax-free
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Georgia Tax-free 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 Georgia Tax-free 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 Georgia Tax Free Bond, you can compare the effects of market volatilities on Ab Impact and Georgia Tax-free 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 Georgia Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Georgia Tax-free.
Diversification Opportunities for Ab Impact and Georgia Tax-free
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ABIMX and Georgia is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Georgia Tax Free Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Georgia Tax Free 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 Georgia Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Georgia Tax Free has no effect on the direction of Ab Impact i.e., Ab Impact and Georgia Tax-free go up and down completely randomly.
Pair Corralation between Ab Impact and Georgia Tax-free
Assuming the 90 days horizon Ab Impact Municipal is expected to under-perform the Georgia Tax-free. In addition to that, Ab Impact is 1.11 times more volatile than Georgia Tax Free Bond. It trades about -0.1 of its total potential returns per unit of risk. Georgia Tax Free Bond is currently generating about -0.08 per unit of volatility. If you would invest 1,100 in Georgia Tax Free Bond on October 18, 2024 and sell it today you would lose (23.00) from holding Georgia Tax Free Bond or give up 2.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Impact Municipal vs. Georgia Tax Free Bond
Performance |
| Timeline |
| Ab Impact Municipal |
| Georgia Tax Free |
Ab Impact and Georgia Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Georgia Tax-free
The main advantage of trading using opposite Ab Impact and Georgia Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Georgia Tax-free 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 Georgia Tax-free will offset losses from the drop in Georgia Tax-free's long position.| Ab Impact vs. Amg River Road | Ab Impact vs. Boston Partners Small | Ab Impact vs. Fpa Queens Road | Ab Impact vs. Mutual Of America |
| Georgia Tax-free vs. Oklahoma Municipal Fund | Georgia Tax-free vs. Old Westbury Municipal | Georgia Tax-free vs. Ab Impact Municipal | Georgia Tax-free vs. Multisector Bond Sma |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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