Correlation Between Ab Municipal and Ab Concentrated
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Ab Concentrated 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 Ab Concentrated 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 Ab Centrated Growth, you can compare the effects of market volatilities on Ab Municipal and Ab Concentrated 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 Ab Concentrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Ab Concentrated.
Diversification Opportunities for Ab Municipal and Ab Concentrated
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AUNYX and WPSIX is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Ab Centrated Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Centrated Growth 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 Ab Concentrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Centrated Growth has no effect on the direction of Ab Municipal i.e., Ab Municipal and Ab Concentrated go up and down completely randomly.
Pair Corralation between Ab Municipal and Ab Concentrated
Assuming the 90 days horizon Ab Municipal is expected to generate 4.42 times less return on investment than Ab Concentrated. But when comparing it to its historical volatility, Ab Municipal Bond is 5.57 times less risky than Ab Concentrated. It trades about 0.12 of its potential returns per unit of risk. Ab Centrated Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,536 in Ab Centrated Growth on August 26, 2024 and sell it today you would earn a total of 556.00 from holding Ab Centrated Growth or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Ab Centrated Growth
Performance |
| Timeline |
| Ab Municipal Bond |
| Ab Centrated Growth |
Ab Municipal and Ab Concentrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Ab Concentrated
The main advantage of trading using opposite Ab Municipal and Ab Concentrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Ab Concentrated 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 Ab Concentrated will offset losses from the drop in Ab Concentrated'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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |