Correlation Between Ab Municipal and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Massmutual Select 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 Massmutual Select 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 Massmutual Select Total, you can compare the effects of market volatilities on Ab Municipal and Massmutual Select 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 Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Massmutual Select.
Diversification Opportunities for Ab Municipal and Massmutual Select
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between AUNCX and Massmutual is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Massmutual Select Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Total 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 Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select Total has no effect on the direction of Ab Municipal i.e., Ab Municipal and Massmutual Select go up and down completely randomly.
Pair Corralation between Ab Municipal and Massmutual Select
Assuming the 90 days horizon Ab Municipal is expected to generate 1.08 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Ab Municipal Bond is 2.79 times less risky than Massmutual Select. It trades about 0.09 of its potential returns per unit of risk. Massmutual Select Total is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 808.00 in Massmutual Select Total on September 2, 2024 and sell it today you would earn a total of 43.00 from holding Massmutual Select Total or generate 5.32% 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. Massmutual Select Total
Performance |
| Timeline |
| Ab Municipal Bond |
| Massmutual Select Total |
Ab Municipal and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Massmutual Select
The main advantage of trading using opposite Ab Municipal and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Massmutual Select 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 Massmutual Select will offset losses from the drop in Massmutual Select's long position.| Ab Municipal vs. Columbia Vertible Securities | Ab Municipal vs. Advent Claymore Convertible | Ab Municipal vs. Putnam Convertible Incm Gwth | Ab Municipal vs. Absolute Convertible Arbitrage |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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