Correlation Between VanEck Intermediate and AB Active
Can any of the company-specific risk be diversified away by investing in both VanEck Intermediate and AB Active 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 VanEck Intermediate and AB Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Intermediate Muni and AB Active ETFs,, you can compare the effects of market volatilities on VanEck Intermediate and AB Active 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 VanEck Intermediate with a short position of AB Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Intermediate and AB Active.
Diversification Opportunities for VanEck Intermediate and AB Active
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and TAFM is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Intermediate Muni and AB Active ETFs, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Active ETFs, and VanEck Intermediate 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 VanEck Intermediate Muni are associated (or correlated) with AB Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Active ETFs, has no effect on the direction of VanEck Intermediate i.e., VanEck Intermediate and AB Active go up and down completely randomly.
Pair Corralation between VanEck Intermediate and AB Active
Considering the 90-day investment horizon VanEck Intermediate is expected to generate 1.58 times less return on investment than AB Active. In addition to that, VanEck Intermediate is 1.07 times more volatile than AB Active ETFs,. It trades about 0.05 of its total potential returns per unit of risk. AB Active ETFs, is currently generating about 0.08 per unit of volatility. If you would invest 2,442 in AB Active ETFs, on August 25, 2024 and sell it today you would earn a total of 112.00 from holding AB Active ETFs, or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 48.09% |
| Values | Daily Returns |
VanEck Intermediate Muni vs. AB Active ETFs,
Performance |
| Timeline |
| VanEck Intermediate Muni |
| AB Active ETFs, |
VanEck Intermediate and AB Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Intermediate and AB Active
The main advantage of trading using opposite VanEck Intermediate and AB Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Intermediate position performs unexpectedly, AB Active 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 Active will offset losses from the drop in AB Active's long position.| VanEck Intermediate vs. BlackRock Intermediate Muni | VanEck Intermediate vs. SSGA Active Trust | VanEck Intermediate vs. SPDR MarketAxess Investment | VanEck Intermediate vs. SSGA Active Trust |
| AB Active vs. SSGA Active Trust | AB Active vs. SPDR Nuveen Municipal | AB Active vs. Xtrackers California Municipal | AB Active vs. iShares Short Maturity |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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