Correlation Between Ab Municipal and Sit Minnesota
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Sit Minnesota 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 Sit Minnesota 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 Sit Minnesota Tax Free, you can compare the effects of market volatilities on Ab Municipal and Sit Minnesota 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 Sit Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Sit Minnesota.
Diversification Opportunities for Ab Municipal and Sit Minnesota
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AUNCX and SIT is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Sit Minnesota Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Minnesota Tax 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 Sit Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Minnesota Tax has no effect on the direction of Ab Municipal i.e., Ab Municipal and Sit Minnesota go up and down completely randomly.
Pair Corralation between Ab Municipal and Sit Minnesota
Assuming the 90 days horizon Ab Municipal is expected to generate 2.61 times less return on investment than Sit Minnesota. But when comparing it to its historical volatility, Ab Municipal Bond is 1.71 times less risky than Sit Minnesota. It trades about 0.1 of its potential returns per unit of risk. Sit Minnesota Tax Free is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 921.00 in Sit Minnesota Tax Free on September 1, 2024 and sell it today you would earn a total of 46.00 from holding Sit Minnesota Tax Free or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Sit Minnesota Tax Free
Performance |
| Timeline |
| Ab Municipal Bond |
| Sit Minnesota Tax |
Ab Municipal and Sit Minnesota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Sit Minnesota
The main advantage of trading using opposite Ab Municipal and Sit Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Sit Minnesota 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 Sit Minnesota will offset losses from the drop in Sit Minnesota'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 |
| Sit Minnesota vs. Bbh Intermediate Municipal | Sit Minnesota vs. Ft 7934 Corporate | Sit Minnesota vs. California Bond Fund | Sit Minnesota vs. Multisector Bond Sma |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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