Correlation Between Ab Discovery and Maine Municipal
Can any of the company-specific risk be diversified away by investing in both Ab Discovery and Maine Municipal 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 Discovery and Maine Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Discovery Value and Maine Municipal Fund, you can compare the effects of market volatilities on Ab Discovery and Maine Municipal 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 Discovery with a short position of Maine Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Discovery and Maine Municipal.
Diversification Opportunities for Ab Discovery and Maine Municipal
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABYSX and Maine is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ab Discovery Value and Maine Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maine Municipal and Ab Discovery 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 Discovery Value are associated (or correlated) with Maine Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maine Municipal has no effect on the direction of Ab Discovery i.e., Ab Discovery and Maine Municipal go up and down completely randomly.
Pair Corralation between Ab Discovery and Maine Municipal
Assuming the 90 days horizon Ab Discovery Value is expected to generate 5.26 times more return on investment than Maine Municipal. However, Ab Discovery is 5.26 times more volatile than Maine Municipal Fund. It trades about 0.08 of its potential returns per unit of risk. Maine Municipal Fund is currently generating about 0.04 per unit of risk. If you would invest 2,275 in Ab Discovery Value on September 1, 2024 and sell it today you would earn a total of 361.00 from holding Ab Discovery Value or generate 15.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Discovery Value vs. Maine Municipal Fund
Performance |
| Timeline |
| Ab Discovery Value |
| Maine Municipal |
Ab Discovery and Maine Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Discovery and Maine Municipal
The main advantage of trading using opposite Ab Discovery and Maine Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Discovery position performs unexpectedly, Maine Municipal 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 Maine Municipal will offset losses from the drop in Maine Municipal's long position.| Ab Discovery vs. Ab Global E | Ab Discovery vs. Ab Global E | Ab Discovery vs. Ab Global E | Ab Discovery vs. Ab Minnesota Portfolio |
| Maine Municipal vs. Viking Tax Free Fund | Maine Municipal vs. Integrity Dividend Summit | Maine Municipal vs. Integrity Dividend Summit | Maine Municipal vs. Nebraska Municipal Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |