Correlation Between Large-cap Growth and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both Large-cap Growth 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 Large-cap Growth and Ab Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Large Cap Growth Profund and Ab Municipal Bond, you can compare the effects of market volatilities on Large-cap Growth 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 Large-cap Growth with a short position of Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large-cap Growth and Ab Municipal.
Diversification Opportunities for Large-cap Growth and Ab Municipal
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Large-cap and AUNTX is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Growth Profund 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 Large-cap Growth 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 Large Cap Growth Profund 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 Large-cap Growth i.e., Large-cap Growth and Ab Municipal go up and down completely randomly.
Pair Corralation between Large-cap Growth and Ab Municipal
Assuming the 90 days horizon Large Cap Growth Profund is expected to generate 10.92 times more return on investment than Ab Municipal. However, Large-cap Growth is 10.92 times more volatile than Ab Municipal Bond. It trades about 0.09 of its potential returns per unit of risk. Ab Municipal Bond is currently generating about 0.31 per unit of risk. If you would invest 4,552 in Large Cap Growth Profund on November 3, 2024 and sell it today you would earn a total of 115.00 from holding Large Cap Growth Profund or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Large Cap Growth Profund vs. Ab Municipal Bond
Performance |
| Timeline |
| Large Cap Growth |
| Ab Municipal Bond |
Large-cap Growth and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Large-cap Growth and Ab Municipal
The main advantage of trading using opposite Large-cap Growth and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Large-cap Growth 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.| Large-cap Growth vs. Morningstar Growth Etf | Large-cap Growth vs. Vanguard Growth And | Large-cap Growth vs. The Hartford Growth | Large-cap Growth vs. Transamerica Capital Growth |
| Ab Municipal vs. Nuveen Core Equity | Ab Municipal vs. Gmo Global Equity | Ab Municipal vs. Dreyfusstandish Global Fixed | Ab Municipal vs. Transamerica International Equity |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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