Correlation Between Ab Municipal and Tiaa-cref Inflation
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Tiaa-cref Inflation 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 Tiaa-cref Inflation 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 Tiaa Cref Inflation Link, you can compare the effects of market volatilities on Ab Municipal and Tiaa-cref Inflation 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 Tiaa-cref Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Tiaa-cref Inflation.
Diversification Opportunities for Ab Municipal and Tiaa-cref Inflation
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between AUNTX and Tiaa-cref is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Tiaa Cref Inflation Link in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Inflation 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 Tiaa-cref Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Inflation has no effect on the direction of Ab Municipal i.e., Ab Municipal and Tiaa-cref Inflation go up and down completely randomly.
Pair Corralation between Ab Municipal and Tiaa-cref Inflation
Assuming the 90 days horizon Ab Municipal Bond is expected to generate 0.94 times more return on investment than Tiaa-cref Inflation. However, Ab Municipal Bond is 1.07 times less risky than Tiaa-cref Inflation. It trades about 0.21 of its potential returns per unit of risk. Tiaa Cref Inflation Link is currently generating about 0.08 per unit of risk. If you would invest 1,066 in Ab Municipal Bond on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Ab Municipal Bond or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Tiaa Cref Inflation Link
Performance |
| Timeline |
| Ab Municipal Bond |
| Tiaa Cref Inflation |
Ab Municipal and Tiaa-cref Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Tiaa-cref Inflation
The main advantage of trading using opposite Ab Municipal and Tiaa-cref Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Tiaa-cref Inflation 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 Tiaa-cref Inflation will offset losses from the drop in Tiaa-cref Inflation's long position.| Ab Municipal vs. Ab Global E | Ab Municipal vs. Ab Global E | Ab Municipal vs. Ab Minnesota Portfolio | Ab Municipal vs. Ab All Market |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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