Correlation Between Ab Municipal and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Invesco Municipal 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 Invesco Municipal 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 Invesco Municipal Income, you can compare the effects of market volatilities on Ab Municipal and Invesco Municipal 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 Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Invesco Municipal.
Diversification Opportunities for Ab Municipal and Invesco Municipal
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUNTX and Invesco is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Invesco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Income 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 Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Income has no effect on the direction of Ab Municipal i.e., Ab Municipal and Invesco Municipal go up and down completely randomly.
Pair Corralation between Ab Municipal and Invesco Municipal
Assuming the 90 days horizon Ab Municipal is expected to generate 1.87 times less return on investment than Invesco Municipal. But when comparing it to its historical volatility, Ab Municipal Bond is 2.25 times less risky than Invesco Municipal. It trades about 0.23 of its potential returns per unit of risk. Invesco Municipal Income is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,201 in Invesco Municipal Income on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Invesco Municipal Income or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Municipal Bond vs. Invesco Municipal Income
Performance |
| Timeline |
| Ab Municipal Bond |
| Invesco Municipal Income |
Ab Municipal and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Invesco Municipal
The main advantage of trading using opposite Ab Municipal and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Invesco Municipal 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 Invesco Municipal will offset losses from the drop in Invesco Municipal's long position.| Ab Municipal vs. Tiaa Cref Real Estate | Ab Municipal vs. Jhancock Real Estate | Ab Municipal vs. Msif Real Estate | Ab Municipal vs. Prudential Real Estate |
| Invesco Municipal vs. Harbor Diversified International | Invesco Municipal vs. Fidelity Advisor Diversified | Invesco Municipal vs. Small Cap Stock | Invesco Municipal vs. Adams Diversified Equity |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |