Correlation Between Ab Municipal and Cref Money
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Cref Money 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 Cref Money 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 Cref Money Market, you can compare the effects of market volatilities on Ab Municipal and Cref Money 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 Cref Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Cref Money.
Diversification Opportunities for Ab Municipal and Cref Money
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AUNTX and Cref is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Cref Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Money Market 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 Cref Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Money Market has no effect on the direction of Ab Municipal i.e., Ab Municipal and Cref Money go up and down completely randomly.
Pair Corralation between Ab Municipal and Cref Money
Assuming the 90 days horizon Ab Municipal Bond is expected to under-perform the Cref Money. In addition to that, Ab Municipal is 12.64 times more volatile than Cref Money Market. It trades about -0.13 of its total potential returns per unit of risk. Cref Money Market is currently generating about 1.08 per unit of volatility. If you would invest 2,977 in Cref Money Market on October 17, 2024 and sell it today you would earn a total of 11.00 from holding Cref Money Market or generate 0.37% 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. Cref Money Market
Performance |
| Timeline |
| Ab Municipal Bond |
| Cref Money Market |
Ab Municipal and Cref Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Cref Money
The main advantage of trading using opposite Ab Municipal and Cref Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Cref Money 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 Cref Money will offset losses from the drop in Cref Money's long position.| Ab Municipal vs. Fidelity Vertible Securities | Ab Municipal vs. Putnam Vertible Securities | Ab Municipal vs. Lord Abbett Vertible | Ab Municipal vs. Columbia Convertible Securities |
| Cref Money vs. Ab Municipal Bond | Cref Money vs. California Municipal Portfolio | Cref Money vs. Aig Government Money | Cref Money vs. Blackrock Pa Muni |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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