Correlation Between Ab Municipal and Fidelity Managed
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Fidelity 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 Fidelity 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 Fidelity Managed Retirement, you can compare the effects of market volatilities on Ab Municipal and Fidelity 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 Fidelity Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Fidelity Managed.
Diversification Opportunities for Ab Municipal and Fidelity Managed
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AUNTX and Fidelity is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Fidelity Managed Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Managed Ret 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 Fidelity Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Managed Ret has no effect on the direction of Ab Municipal i.e., Ab Municipal and Fidelity Managed go up and down completely randomly.
Pair Corralation between Ab Municipal and Fidelity Managed
Assuming the 90 days horizon Ab Municipal is expected to generate 1.59 times less return on investment than Fidelity Managed. But when comparing it to its historical volatility, Ab Municipal Bond is 1.79 times less risky than Fidelity Managed. It trades about 0.09 of its potential returns per unit of risk. Fidelity Managed Retirement is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,014 in Fidelity Managed Retirement on August 30, 2024 and sell it today you would earn a total of 641.00 from holding Fidelity Managed Retirement or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Fidelity Managed Retirement
Performance |
| Timeline |
| Ab Municipal Bond |
| Fidelity Managed Ret |
Ab Municipal and Fidelity Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Fidelity Managed
The main advantage of trading using opposite Ab Municipal and Fidelity Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Fidelity 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 Fidelity Managed will offset losses from the drop in Fidelity Managed's long position.| Ab Municipal vs. Vanguard Limited Term Tax Exempt | Ab Municipal vs. HUMANA INC | Ab Municipal vs. Aquagold International | Ab Municipal vs. Barloworld Ltd ADR |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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