Correlation Between Ab Impact and Polen Smid
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Polen Smid 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 Ab Impact and Polen Smid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Impact Municipal and Polen Smid, you can compare the effects of market volatilities on Ab Impact and Polen Smid 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 Ab Impact with a short position of Polen Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Polen Smid.
Diversification Opportunities for Ab Impact and Polen Smid
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABIMX and Polen is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Polen Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Smid and Ab Impact 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 Ab Impact Municipal are associated (or correlated) with Polen Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Smid has no effect on the direction of Ab Impact i.e., Ab Impact and Polen Smid go up and down completely randomly.
Pair Corralation between Ab Impact and Polen Smid
Assuming the 90 days horizon Ab Impact Municipal is expected to generate 0.26 times more return on investment than Polen Smid. However, Ab Impact Municipal is 3.88 times less risky than Polen Smid. It trades about -0.07 of its potential returns per unit of risk. Polen Smid is currently generating about -0.22 per unit of risk. If you would invest 999.00 in Ab Impact Municipal on December 4, 2024 and sell it today you would lose (13.00) from holding Ab Impact Municipal or give up 1.3% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ab Impact Municipal vs. Polen Smid
Performance |
Timeline |
Ab Impact Municipal |
Polen Smid |
Ab Impact and Polen Smid Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Impact and Polen Smid
The main advantage of trading using opposite Ab Impact and Polen Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Polen Smid 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 Polen Smid will offset losses from the drop in Polen Smid's long position.Ab Impact vs. Touchstone Large Cap | Ab Impact vs. John Hancock Variable | Ab Impact vs. Fidelity Large Cap | Ab Impact vs. Virtus Nfj Large Cap |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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