Correlation Between Fabxx and Maine Municipal
Can any of the company-specific risk be diversified away by investing in both Fabxx and Maine 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 Fabxx and Maine Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabxx and Maine Municipal Fund, you can compare the effects of market volatilities on Fabxx and Maine 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 Fabxx with a short position of Maine Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabxx and Maine Municipal.
Diversification Opportunities for Fabxx and Maine Municipal
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fabxx and Maine is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fabxx and Maine Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maine Municipal and Fabxx 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 Fabxx are associated (or correlated) with Maine Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maine Municipal has no effect on the direction of Fabxx i.e., Fabxx and Maine Municipal go up and down completely randomly.
Pair Corralation between Fabxx and Maine Municipal
Assuming the 90 days horizon Fabxx is expected to under-perform the Maine Municipal. In addition to that, Fabxx is 67.33 times more volatile than Maine Municipal Fund. It trades about -0.3 of its total potential returns per unit of risk. Maine Municipal Fund is currently generating about 0.57 per unit of volatility. If you would invest 945.00 in Maine Municipal Fund on September 13, 2024 and sell it today you would earn a total of 16.00 from holding Maine Municipal Fund or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fabxx vs. Maine Municipal Fund
Performance |
| Timeline |
| Fabxx |
| Maine Municipal |
Fabxx and Maine Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabxx and Maine Municipal
The main advantage of trading using opposite Fabxx and Maine Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabxx position performs unexpectedly, Maine 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 Maine Municipal will offset losses from the drop in Maine Municipal's long position.| Fabxx vs. Franklin High Yield | Fabxx vs. Doubleline Yield Opportunities | Fabxx vs. Artisan High Income | Fabxx vs. Bbh Intermediate Municipal |
| Maine Municipal vs. Viking Tax Free Fund | Maine Municipal vs. Viking Tax Free Fund | Maine Municipal vs. Integrity Dividend Summit | Maine Municipal vs. Integrity Dividend Summit |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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