Correlation Between Ab Municipal and Blackrock
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Blackrock 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 Municipal and Blackrock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Municipal Bond and Blackrock Pa Muni, you can compare the effects of market volatilities on Ab Municipal and Blackrock 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 Municipal with a short position of Blackrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Blackrock.
Diversification Opportunities for Ab Municipal and Blackrock
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AUNTX and Blackrock is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Blackrock Pa Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Pa Muni and Ab Municipal 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 Municipal Bond are associated (or correlated) with Blackrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Pa Muni has no effect on the direction of Ab Municipal i.e., Ab Municipal and Blackrock go up and down completely randomly.
Pair Corralation between Ab Municipal and Blackrock
Assuming the 90 days horizon Ab Municipal Bond is expected to generate 0.65 times more return on investment than Blackrock. However, Ab Municipal Bond is 1.53 times less risky than Blackrock. It trades about 0.08 of its potential returns per unit of risk. Blackrock Pa Muni is currently generating about 0.04 per unit of risk. If you would invest 997.00 in Ab Municipal Bond on October 9, 2024 and sell it today you would earn a total of 70.00 from holding Ab Municipal Bond or generate 7.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ab Municipal Bond vs. Blackrock Pa Muni
Performance |
Timeline |
Ab Municipal Bond |
Blackrock Pa Muni |
Ab Municipal and Blackrock Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Municipal and Blackrock
The main advantage of trading using opposite Ab Municipal and Blackrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Blackrock 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 Blackrock will offset losses from the drop in Blackrock's long position.Ab Municipal vs. Dreyfus Technology Growth | Ab Municipal vs. Icon Information Technology | Ab Municipal vs. Goldman Sachs Technology | Ab Municipal vs. Mfs Technology Fund |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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