Correlation Between Floating Rate and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both Floating Rate 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 Floating Rate and Ab Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floating Rate Fund and Ab Municipal Bond, you can compare the effects of market volatilities on Floating Rate 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 Floating Rate with a short position of Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floating Rate and Ab Municipal.
Diversification Opportunities for Floating Rate and Ab Municipal
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Floating and AUNTX is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Floating Rate Fund 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 Floating Rate 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 Floating Rate Fund 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 Floating Rate i.e., Floating Rate and Ab Municipal go up and down completely randomly.
Pair Corralation between Floating Rate and Ab Municipal
Assuming the 90 days horizon Floating Rate is expected to generate 1.28 times less return on investment than Ab Municipal. In addition to that, Floating Rate is 1.44 times more volatile than Ab Municipal Bond. It trades about 0.21 of its total potential returns per unit of risk. Ab Municipal Bond is currently generating about 0.39 per unit of volatility. If you would invest 1,056 in Ab Municipal Bond on October 24, 2024 and sell it today you would earn a total of 10.00 from holding Ab Municipal Bond or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floating Rate Fund vs. Ab Municipal Bond
Performance |
| Timeline |
| Floating Rate |
| Ab Municipal Bond |
Floating Rate and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floating Rate and Ab Municipal
The main advantage of trading using opposite Floating Rate and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floating Rate 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.| Floating Rate vs. Sp Midcap Index | Floating Rate vs. Barings Emerging Markets | Floating Rate vs. Locorr Market Trend | Floating Rate vs. Aqr Sustainable Long Short |
| Ab Municipal vs. Smead Value Fund | Ab Municipal vs. Calvert Large Cap | Ab Municipal vs. Qs Large Cap | Ab Municipal vs. Large Cap Growth Profund |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |