Correlation Between California Bond and Ab Impact
Can any of the company-specific risk be diversified away by investing in both California Bond and Ab Impact 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 California Bond and Ab Impact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Ab Impact Municipal, you can compare the effects of market volatilities on California Bond and Ab Impact 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 California Bond with a short position of Ab Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Ab Impact.
Diversification Opportunities for California Bond and Ab Impact
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between California and ABIMX is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and Ab Impact Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Impact Municipal and California Bond 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 California Bond Fund are associated (or correlated) with Ab Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Impact Municipal has no effect on the direction of California Bond i.e., California Bond and Ab Impact go up and down completely randomly.
Pair Corralation between California Bond and Ab Impact
Assuming the 90 days horizon California Bond Fund is expected to generate 0.89 times more return on investment than Ab Impact. However, California Bond Fund is 1.12 times less risky than Ab Impact. It trades about 0.2 of its potential returns per unit of risk. Ab Impact Municipal is currently generating about 0.15 per unit of risk. If you would invest 1,032 in California Bond Fund on August 29, 2024 and sell it today you would earn a total of 16.00 from holding California Bond Fund or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Bond Fund vs. Ab Impact Municipal
Performance |
| Timeline |
| California Bond |
| Ab Impact Municipal |
California Bond and Ab Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Ab Impact
The main advantage of trading using opposite California Bond and Ab Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond position performs unexpectedly, Ab Impact 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 Impact will offset losses from the drop in Ab Impact's long position.| California Bond vs. Tax Exempt Fund Of | California Bond vs. HUMANA INC | California Bond vs. Aquagold International | California Bond vs. Barloworld Ltd ADR |
| Ab Impact vs. HUMANA INC | Ab Impact vs. Aquagold International | Ab Impact vs. Barloworld Ltd ADR | Ab Impact vs. Morningstar Unconstrained Allocation |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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