Correlation Between Quantified Stf and Ab Impact

Can any of the company-specific risk be diversified away by investing in both Quantified Stf 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 Quantified Stf and Ab Impact into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Quantified Stf Fund and Ab Impact Municipal, you can compare the effects of market volatilities on Quantified Stf 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 Quantified Stf with a short position of Ab Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantified Stf and Ab Impact.

Diversification Opportunities for Quantified Stf and Ab Impact

-0.07

Correlation Coefficient

Quantified Stf  Ab Impact

Good diversification

The 3 months correlation between Quantified and ABIMX is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Quantified Stf 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 Quantified Stf 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 Quantified Stf 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 Quantified Stf i.e., Quantified Stf and Ab Impact go up and down completely randomly.

Pair Corralation between Quantified Stf and Ab Impact

Assuming the 90 days horizon Quantified Stf Fund is expected to generate 6.77 times more return on investment than Ab Impact. However, Quantified Stf is 6.77 times more volatile than Ab Impact Municipal. It trades about 0.08 of its potential returns per unit of risk. Ab Impact Municipal is currently generating about 0.08 per unit of risk. If you would invest  1,358  in Quantified Stf Fund on September 13, 2024 and sell it today you would earn a total of  475.00  from holding Quantified Stf Fund or generate 34.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Quantified Stf Fund  vs.  Ab Impact Municipal

Quantified Stf

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quantified Stf Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Quantified Stf showed solid returns over the last few months and may actually be approaching a breakup point.

Ab Impact Municipal

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Impact Municipal are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Ab Impact is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Quantified Stf and Ab Impact

The main advantage of trading using opposite Quantified Stf and Ab Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantified Stf 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.

The idea behind Quantified Stf Fund and Ab Impact Municipal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.