Correlation Between Ab Municipal and Guggenheim Managed
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Guggenheim 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 Guggenheim 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 Guggenheim Managed Futures, you can compare the effects of market volatilities on Ab Municipal and Guggenheim 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 Guggenheim Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Guggenheim Managed.
Diversification Opportunities for Ab Municipal and Guggenheim Managed
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AUNYX and Guggenheim is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Guggenheim Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Managed 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 Guggenheim Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Managed has no effect on the direction of Ab Municipal i.e., Ab Municipal and Guggenheim Managed go up and down completely randomly.
Pair Corralation between Ab Municipal and Guggenheim Managed
Assuming the 90 days horizon Ab Municipal Bond is expected to generate 0.27 times more return on investment than Guggenheim Managed. However, Ab Municipal Bond is 3.7 times less risky than Guggenheim Managed. It trades about 0.12 of its potential returns per unit of risk. Guggenheim Managed Futures is currently generating about -0.04 per unit of risk. If you would invest 1,068 in Ab Municipal Bond on August 31, 2024 and sell it today you would earn a total of 13.00 from holding Ab Municipal Bond or generate 1.22% 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. Guggenheim Managed Futures
Performance |
| Timeline |
| Ab Municipal Bond |
| Guggenheim Managed |
Ab Municipal and Guggenheim Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Guggenheim Managed
The main advantage of trading using opposite Ab Municipal and Guggenheim Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Guggenheim 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 Guggenheim Managed will offset losses from the drop in Guggenheim Managed's long position.| Ab Municipal vs. Nationwide Inflation Protected Securities | Ab Municipal vs. Lord Abbett Inflation | Ab Municipal vs. The Hartford Inflation | Ab Municipal vs. Ab Bond Inflation |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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