Correlation Between Ab Bond and New York
Can any of the company-specific risk be diversified away by investing in both Ab Bond and New York 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 Bond and New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and New York Municipal, you can compare the effects of market volatilities on Ab Bond and New York 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 Bond with a short position of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and New York.
Diversification Opportunities for Ab Bond and New York
Very weak diversification
The 3 months correlation between ABNOX and New is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and New York Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Municipal and Ab Bond 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 Bond Inflation are associated (or correlated) with New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Municipal has no effect on the direction of Ab Bond i.e., Ab Bond and New York go up and down completely randomly.
Pair Corralation between Ab Bond and New York
Assuming the 90 days horizon Ab Bond Inflation is expected to generate 1.48 times more return on investment than New York. However, Ab Bond is 1.48 times more volatile than New York Municipal. It trades about 0.29 of its potential returns per unit of risk. New York Municipal is currently generating about 0.11 per unit of risk. If you would invest 1,001 in Ab Bond Inflation on October 24, 2024 and sell it today you would earn a total of 9.00 from holding Ab Bond Inflation or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. New York Municipal
Performance |
| Timeline |
| Ab Bond Inflation |
| New York Municipal |
Ab Bond and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and New York
The main advantage of trading using opposite Ab Bond and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Ab Bond vs. First Trust Specialty | Ab Bond vs. Prudential Financial Services | Ab Bond vs. Davis Financial Fund | Ab Bond vs. Putnam Global Financials |
| New York vs. Ab Bond Inflation | New York vs. Credit Suisse Managed | New York vs. Ab Bond Inflation | New York vs. Lord Abbett Inflation |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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