Correlation Between Ab Minnesota and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both Ab Minnesota 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 Ab Minnesota and Ab Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Minnesota Portfolio and Ab Municipal Bond, you can compare the effects of market volatilities on Ab Minnesota 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 Ab Minnesota with a short position of Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Minnesota and Ab Municipal.
Diversification Opportunities for Ab Minnesota and Ab Municipal
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between AMNAX and AUNYX is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ab Minnesota Portfolio 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 Ab Minnesota 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 Minnesota Portfolio 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 Ab Minnesota i.e., Ab Minnesota and Ab Municipal go up and down completely randomly.
Pair Corralation between Ab Minnesota and Ab Municipal
Assuming the 90 days horizon Ab Minnesota Portfolio is expected to generate 1.45 times more return on investment than Ab Municipal. However, Ab Minnesota is 1.45 times more volatile than Ab Municipal Bond. It trades about 0.14 of its potential returns per unit of risk. Ab Municipal Bond is currently generating about 0.17 per unit of risk. If you would invest 875.00 in Ab Minnesota Portfolio on August 29, 2024 and sell it today you would earn a total of 90.00 from holding Ab Minnesota Portfolio or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.66% |
| Values | Daily Returns |
Ab Minnesota Portfolio vs. Ab Municipal Bond
Performance |
| Timeline |
| Ab Minnesota Portfolio |
| Ab Municipal Bond |
Ab Minnesota and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Minnesota and Ab Municipal
The main advantage of trading using opposite Ab Minnesota and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Minnesota 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.| Ab Minnesota vs. Fidelity Pennsylvania Municipal | Ab Minnesota vs. Fidelity Maryland Municipal | Ab Minnesota vs. Fidelity Arizona Municipal | Ab Minnesota vs. Fidelity Necticut Municipal |
| Ab Municipal vs. Touchstone Large Cap | Ab Municipal vs. Qs Large Cap | Ab Municipal vs. Qs Large Cap | Ab Municipal vs. Transamerica Large Cap |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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