Correlation Between Georgia Tax-free and Ab Global
Can any of the company-specific risk be diversified away by investing in both Georgia Tax-free and Ab Global 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 Georgia Tax-free and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Georgia Tax Free Bond and Ab Global E, you can compare the effects of market volatilities on Georgia Tax-free and Ab Global 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 Georgia Tax-free with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Georgia Tax-free and Ab Global.
Diversification Opportunities for Georgia Tax-free and Ab Global
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Georgia and GCEAX is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Georgia Tax Free Bond and Ab Global E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global E and Georgia Tax-free 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 Georgia Tax Free Bond are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global E has no effect on the direction of Georgia Tax-free i.e., Georgia Tax-free and Ab Global go up and down completely randomly.
Pair Corralation between Georgia Tax-free and Ab Global
Assuming the 90 days horizon Georgia Tax Free Bond is expected to generate 0.54 times more return on investment than Ab Global. However, Georgia Tax Free Bond is 1.84 times less risky than Ab Global. It trades about 0.15 of its potential returns per unit of risk. Ab Global E is currently generating about -0.01 per unit of risk. If you would invest 1,089 in Georgia Tax Free Bond on August 28, 2024 and sell it today you would earn a total of 13.00 from holding Georgia Tax Free Bond or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Georgia Tax Free Bond vs. Ab Global E
Performance |
| Timeline |
| Georgia Tax Free |
| Ab Global E |
Georgia Tax-free and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Georgia Tax-free and Ab Global
The main advantage of trading using opposite Georgia Tax-free and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Georgia Tax-free position performs unexpectedly, Ab Global 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 Global will offset losses from the drop in Ab Global's long position.| Georgia Tax-free vs. New Jersey Tax Free | Georgia Tax-free vs. New York Tax Free | Georgia Tax-free vs. Maryland Short Term Tax Free |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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