Correlation Between New York and Ab Virginia
Can any of the company-specific risk be diversified away by investing in both New York and Ab Virginia 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 New York and Ab Virginia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New York Municipal and Ab Virginia Portfolio, you can compare the effects of market volatilities on New York and Ab Virginia 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 New York with a short position of Ab Virginia. Check out your portfolio center. Please also check ongoing floating volatility patterns of New York and Ab Virginia.
Diversification Opportunities for New York and Ab Virginia
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and AVAYX is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding New York Municipal and Ab Virginia Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Virginia Portfolio and New York 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 New York Municipal are associated (or correlated) with Ab Virginia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Virginia Portfolio has no effect on the direction of New York i.e., New York and Ab Virginia go up and down completely randomly.
Pair Corralation between New York and Ab Virginia
Assuming the 90 days horizon New York is expected to generate 1.31 times less return on investment than Ab Virginia. But when comparing it to its historical volatility, New York Municipal is 1.69 times less risky than Ab Virginia. It trades about 0.18 of its potential returns per unit of risk. Ab Virginia Portfolio is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 959.00 in Ab Virginia Portfolio on September 4, 2024 and sell it today you would earn a total of 101.00 from holding Ab Virginia Portfolio or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New York Municipal vs. Ab Virginia Portfolio
Performance |
| Timeline |
| New York Municipal |
| Ab Virginia Portfolio |
New York and Ab Virginia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New York and Ab Virginia
The main advantage of trading using opposite New York and Ab Virginia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New York position performs unexpectedly, Ab Virginia 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 Virginia will offset losses from the drop in Ab Virginia's long position.| New York vs. Mondrian Emerging Markets | New York vs. Locorr Market Trend | New York vs. Oklahoma College Savings | New York vs. Fundvantage Trust |
| Ab Virginia vs. Ab Global Risk | Ab Virginia vs. Siit High Yield | Ab Virginia vs. Gmo High Yield | Ab Virginia vs. Western Asset High |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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