Correlation Between Ab Municipal and Guidepath(r) Managed
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Guidepath(r) Managed 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 Guidepath(r) Managed 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 Guidepath Managed Futures, you can compare the effects of market volatilities on Ab Municipal and Guidepath(r) Managed 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 Guidepath(r) Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Guidepath(r) Managed.
Diversification Opportunities for Ab Municipal and Guidepath(r) Managed
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AUNCX and Guidepath(r) is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Guidepath Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Managed Futures 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 Guidepath(r) Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Managed Futures has no effect on the direction of Ab Municipal i.e., Ab Municipal and Guidepath(r) Managed go up and down completely randomly.
Pair Corralation between Ab Municipal and Guidepath(r) Managed
Assuming the 90 days horizon Ab Municipal Bond is expected to generate 0.15 times more return on investment than Guidepath(r) Managed. However, Ab Municipal Bond is 6.7 times less risky than Guidepath(r) Managed. It trades about 0.27 of its potential returns per unit of risk. Guidepath Managed Futures is currently generating about -0.04 per unit of risk. If you would invest 1,074 in Ab Municipal Bond on November 27, 2024 and sell it today you would earn a total of 8.00 from holding Ab Municipal Bond or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Guidepath Managed Futures
Performance |
| Timeline |
| Ab Municipal Bond |
| Guidepath Managed Futures |
Ab Municipal and Guidepath(r) Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Guidepath(r) Managed
The main advantage of trading using opposite Ab Municipal and Guidepath(r) Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Guidepath(r) Managed 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 Guidepath(r) Managed will offset losses from the drop in Guidepath(r) Managed's long position.| Ab Municipal vs. Transamerica Asset Allocation | Ab Municipal vs. Rational Defensive Growth | Ab Municipal vs. Jpmorgan Large Cap | Ab Municipal vs. Oklahoma College Savings |
| Guidepath(r) Managed vs. Tfa Alphagen Growth | Guidepath(r) Managed vs. Small Pany Growth | Guidepath(r) Managed vs. Victory Incore Fund | Guidepath(r) Managed vs. Rbc Emerging Markets |
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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