Correlation Between Ab Municipal and Federated Global
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Federated Global 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 Federated Global 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 Federated Global Allocation, you can compare the effects of market volatilities on Ab Municipal and Federated Global 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 Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Federated Global.
Diversification Opportunities for Ab Municipal and Federated Global
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUNCX and Federated is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Federated Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global All 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 Federated Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Global All has no effect on the direction of Ab Municipal i.e., Ab Municipal and Federated Global go up and down completely randomly.
Pair Corralation between Ab Municipal and Federated Global
Assuming the 90 days horizon Ab Municipal is expected to generate 1.83 times less return on investment than Federated Global. But when comparing it to its historical volatility, Ab Municipal Bond is 3.64 times less risky than Federated Global. It trades about 0.4 of its potential returns per unit of risk. Federated Global Allocation is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,114 in Federated Global Allocation on June 12, 2025 and sell it today you would earn a total of 114.00 from holding Federated Global Allocation or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Federated Global Allocation
Performance |
| Timeline |
| Ab Municipal Bond |
| Federated Global All |
Ab Municipal and Federated Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Federated Global
The main advantage of trading using opposite Ab Municipal and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Federated Global 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 Federated Global will offset losses from the drop in Federated Global's long position.| Ab Municipal vs. Angel Oak Financial | Ab Municipal vs. Profunds Money | Ab Municipal vs. John Hancock Money | Ab Municipal vs. Cref Money Market |
| Federated Global vs. Dreyfus Short Intermediate | Federated Global vs. Aamhimco Short Duration | Federated Global vs. Prudential Short Duration | Federated Global vs. Ultra Short Fixed Income |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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