Correlation Between Ab Municipal and Nationwide Investor
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Nationwide Investor 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 Nationwide Investor 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 Nationwide Investor Destinations, you can compare the effects of market volatilities on Ab Municipal and Nationwide Investor 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 Nationwide Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Nationwide Investor.
Diversification Opportunities for Ab Municipal and Nationwide Investor
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUNCX and Nationwide is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Nationwide Investor Destinatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Investor 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 Nationwide Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Investor has no effect on the direction of Ab Municipal i.e., Ab Municipal and Nationwide Investor go up and down completely randomly.
Pair Corralation between Ab Municipal and Nationwide Investor
Assuming the 90 days horizon Ab Municipal Bond is expected to generate 0.26 times more return on investment than Nationwide Investor. However, Ab Municipal Bond is 3.91 times less risky than Nationwide Investor. It trades about 0.06 of its potential returns per unit of risk. Nationwide Investor Destinations is currently generating about -0.05 per unit of risk. If you would invest 1,065 in Ab Municipal Bond on November 2, 2024 and sell it today you would earn a total of 11.00 from holding Ab Municipal Bond or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Nationwide Investor Destinatio
Performance |
| Timeline |
| Ab Municipal Bond |
| Nationwide Investor |
Ab Municipal and Nationwide Investor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Nationwide Investor
The main advantage of trading using opposite Ab Municipal and Nationwide Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Nationwide Investor 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 Nationwide Investor will offset losses from the drop in Nationwide Investor's long position.| Ab Municipal vs. Glg Intl Small | Ab Municipal vs. Tax Managed Mid Small | Ab Municipal vs. Sp Smallcap 600 | Ab Municipal vs. Ab Small Cap |
| Nationwide Investor vs. Fidelity Advisor Financial | Nationwide Investor vs. Putnam Global Financials | Nationwide Investor vs. First Trust Specialty | Nationwide Investor vs. Rmb Mendon Financial |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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