Correlation Between Strategic Advisers and Municipal Bond
Can any of the company-specific risk be diversified away by investing in both Strategic Advisers and Municipal Bond 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 Strategic Advisers and Municipal Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Advisers Municipal and Municipal Bond Fund, you can compare the effects of market volatilities on Strategic Advisers and Municipal Bond 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 Strategic Advisers with a short position of Municipal Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Advisers and Municipal Bond.
Diversification Opportunities for Strategic Advisers and Municipal Bond
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Strategic and Municipal is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Advisers Municipal and Municipal Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Municipal Bond and Strategic Advisers 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 Strategic Advisers Municipal are associated (or correlated) with Municipal Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Municipal Bond has no effect on the direction of Strategic Advisers i.e., Strategic Advisers and Municipal Bond go up and down completely randomly.
Pair Corralation between Strategic Advisers and Municipal Bond
Assuming the 90 days horizon Strategic Advisers Municipal is expected to generate 0.88 times more return on investment than Municipal Bond. However, Strategic Advisers Municipal is 1.14 times less risky than Municipal Bond. It trades about 0.47 of its potential returns per unit of risk. Municipal Bond Fund is currently generating about 0.16 per unit of risk. If you would invest 891.00 in Strategic Advisers Municipal on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Strategic Advisers Municipal or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Strategic Advisers Municipal vs. Municipal Bond Fund
Performance |
| Timeline |
| Strategic Advisers |
| Municipal Bond |
Strategic Advisers and Municipal Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Advisers and Municipal Bond
The main advantage of trading using opposite Strategic Advisers and Municipal Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Advisers position performs unexpectedly, Municipal Bond 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 Municipal Bond will offset losses from the drop in Municipal Bond's long position.| Strategic Advisers vs. Fidelity Freedom 2015 | Strategic Advisers vs. Fidelity Puritan Fund | Strategic Advisers vs. Fidelity Pennsylvania Municipal | Strategic Advisers vs. Fidelity Freedom Index |
| Municipal Bond vs. Wells Fargo Advantage | Municipal Bond vs. Wells Fargo Advantage | Municipal Bond vs. Wells Fargo Advantage | Municipal Bond vs. Wells Fargo Ultra |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |