Correlation Between Guidepath(r) Managed and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both Guidepath(r) Managed and Ab 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 Guidepath(r) Managed and Ab Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidepath Managed Futures and Ab Municipal Bond, you can compare the effects of market volatilities on Guidepath(r) Managed and Ab 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 Guidepath(r) Managed with a short position of Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Managed and Ab Municipal.
Diversification Opportunities for Guidepath(r) Managed and Ab Municipal
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guidepath(r) and AUNYX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and Ab Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Municipal Bond and Guidepath(r) Managed 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 Guidepath Managed Futures are associated (or correlated) with Ab Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Municipal Bond has no effect on the direction of Guidepath(r) Managed i.e., Guidepath(r) Managed and Ab Municipal go up and down completely randomly.
Pair Corralation between Guidepath(r) Managed and Ab Municipal
Assuming the 90 days horizon Guidepath Managed Futures is expected to under-perform the Ab Municipal. In addition to that, Guidepath(r) Managed is 3.67 times more volatile than Ab Municipal Bond. It trades about -0.06 of its total potential returns per unit of risk. Ab Municipal Bond is currently generating about 0.04 per unit of volatility. If you would invest 1,008 in Ab Municipal Bond on January 23, 2025 and sell it today you would earn a total of 42.00 from holding Ab Municipal Bond or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidepath Managed Futures vs. Ab Municipal Bond
Performance |
| Timeline |
| Guidepath Managed Futures |
| Ab Municipal Bond |
Guidepath(r) Managed and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidepath(r) Managed and Ab Municipal
The main advantage of trading using opposite Guidepath(r) Managed and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidepath(r) Managed position performs unexpectedly, Ab 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 Ab Municipal will offset losses from the drop in Ab Municipal's long position.| Guidepath(r) Managed vs. Fidelity Sai Convertible | Guidepath(r) Managed vs. Lord Abbett Convertible | Guidepath(r) Managed vs. Gabelli Convertible And | Guidepath(r) Managed vs. Rationalpier 88 Convertible |
| Ab Municipal vs. Ab Global E | Ab Municipal vs. Ab Global E | Ab Municipal vs. Ab Global E | Ab Municipal vs. Ab Minnesota Portfolio |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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