Correlation Between 361 Global and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both 361 Global and Ab 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 361 Global and Ab Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 361 Global Longshort and Ab Municipal Bond, you can compare the effects of market volatilities on 361 Global and Ab 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 361 Global with a short position of Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of 361 Global and Ab Municipal.
Diversification Opportunities for 361 Global and Ab Municipal
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 361 and AUNTX is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding 361 Global Longshort and Ab Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Municipal Bond and 361 Global 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 361 Global Longshort are associated (or correlated) with Ab Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Municipal Bond has no effect on the direction of 361 Global i.e., 361 Global and Ab Municipal go up and down completely randomly.
Pair Corralation between 361 Global and Ab Municipal
Assuming the 90 days horizon 361 Global Longshort is expected to generate 3.06 times more return on investment than Ab Municipal. However, 361 Global is 3.06 times more volatile than Ab Municipal Bond. It trades about 0.1 of its potential returns per unit of risk. Ab Municipal Bond is currently generating about 0.13 per unit of risk. If you would invest 1,145 in 361 Global Longshort on September 4, 2024 and sell it today you would earn a total of 137.00 from holding 361 Global Longshort or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
361 Global Longshort vs. Ab Municipal Bond
Performance |
| Timeline |
| 361 Global Longshort |
| Ab Municipal Bond |
361 Global and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 361 Global and Ab Municipal
The main advantage of trading using opposite 361 Global and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 361 Global position performs unexpectedly, Ab 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 Ab Municipal will offset losses from the drop in Ab Municipal's long position.| 361 Global vs. Aqr Large Cap | 361 Global vs. Americafirst Large Cap | 361 Global vs. Siit Large Cap | 361 Global vs. Qs Large Cap |
| Ab Municipal vs. Ab Global Real | Ab Municipal vs. Mirova Global Green | Ab Municipal vs. Dreyfusstandish Global Fixed | Ab Municipal vs. 361 Global Longshort |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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