Correlation Between Ab Municipal and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both Ab Municipal 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 Municipal 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 Municipal Bond and Ab Municipal Bond, you can compare the effects of market volatilities on Ab Municipal 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 Municipal with a short position of Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Ab Municipal.
Diversification Opportunities for Ab Municipal and Ab Municipal
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between AUNCX and AUNTX is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond 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 Municipal 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 Municipal Bond 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 Municipal i.e., Ab Municipal and Ab Municipal go up and down completely randomly.
Pair Corralation between Ab Municipal and Ab Municipal
Assuming the 90 days horizon Ab Municipal is expected to generate 1.18 times less return on investment than Ab Municipal. But when comparing it to its historical volatility, Ab Municipal Bond is 1.04 times less risky than Ab Municipal. It trades about 0.14 of its potential returns per unit of risk. Ab Municipal Bond is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,007 in Ab Municipal Bond on September 1, 2024 and sell it today you would earn a total of 68.00 from holding Ab Municipal Bond or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Ab Municipal Bond
Performance |
| Timeline |
| Ab Municipal Bond |
| Ab Municipal Bond |
Ab Municipal and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Ab Municipal
The main advantage of trading using opposite Ab Municipal and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal 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 Municipal vs. Ab Global E | Ab Municipal vs. Ab Global E | Ab Municipal vs. Ab Global E | Ab Municipal vs. Ab Minnesota Portfolio |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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