Correlation Between Ab Global and Maryland Tax-free
Can any of the company-specific risk be diversified away by investing in both Ab Global and Maryland 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 Global and Maryland Tax-free into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Bond and Maryland Tax Free Bond, you can compare the effects of market volatilities on Ab Global and Maryland 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 Global with a short position of Maryland Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Maryland Tax-free.
Diversification Opportunities for Ab Global and Maryland Tax-free
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ANAGX and Maryland is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Maryland Tax Free Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maryland Tax Free and Ab 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 Ab Global Bond are associated (or correlated) with Maryland 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 Maryland Tax Free has no effect on the direction of Ab Global i.e., Ab Global and Maryland Tax-free go up and down completely randomly.
Pair Corralation between Ab Global and Maryland Tax-free
Assuming the 90 days horizon Ab Global Bond is expected to generate 0.65 times more return on investment than Maryland Tax-free. However, Ab Global Bond is 1.55 times less risky than Maryland Tax-free. It trades about -0.54 of its potential returns per unit of risk. Maryland Tax Free Bond is currently generating about -0.4 per unit of risk. If you would invest 697.00 in Ab Global Bond on October 10, 2024 and sell it today you would lose (14.00) from holding Ab Global Bond or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Bond vs. Maryland Tax Free Bond
Performance |
| Timeline |
| Ab Global Bond |
| Maryland Tax Free |
Ab Global and Maryland Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Maryland Tax-free
The main advantage of trading using opposite Ab Global and Maryland Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Maryland 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 Maryland Tax-free will offset losses from the drop in Maryland Tax-free's long position.| Ab Global vs. Tortoise Energy Independence | Ab Global vs. Thrivent Natural Resources | Ab Global vs. Blackrock All Cap Energy | Ab Global vs. Firsthand Alternative Energy |
| Maryland Tax-free vs. First Eagle Gold | Maryland Tax-free vs. Goldman Sachs Short | Maryland Tax-free vs. World Precious Minerals | Maryland Tax-free vs. Sprott Gold Equity |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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