Correlation Between Ab Municipal and Glg Intl
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Glg Intl 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 Glg Intl 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 Glg Intl Small, you can compare the effects of market volatilities on Ab Municipal and Glg Intl 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 Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Glg Intl.
Diversification Opportunities for Ab Municipal and Glg Intl
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AUNCX and Glg is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Glg Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glg Intl Small 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 Glg Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glg Intl Small has no effect on the direction of Ab Municipal i.e., Ab Municipal and Glg Intl go up and down completely randomly.
Pair Corralation between Ab Municipal and Glg Intl
Assuming the 90 days horizon Ab Municipal is expected to generate 2.18 times less return on investment than Glg Intl. But when comparing it to its historical volatility, Ab Municipal Bond is 7.06 times less risky than Glg Intl. It trades about 0.39 of its potential returns per unit of risk. Glg Intl Small is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 8,786 in Glg Intl Small on June 13, 2025 and sell it today you would earn a total of 534.00 from holding Glg Intl Small or generate 6.08% 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. Glg Intl Small
Performance |
| Timeline |
| Ab Municipal Bond |
| Glg Intl Small |
Ab Municipal and Glg Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Glg Intl
The main advantage of trading using opposite Ab Municipal and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Glg Intl 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 Glg Intl will offset losses from the drop in Glg Intl's long position.| Ab Municipal vs. Boyd Watterson Limited | Ab Municipal vs. Kirr Marbach Partners | Ab Municipal vs. Alternative Asset Allocation | Ab Municipal vs. T Rowe Price |
| Glg Intl vs. Franklin Emerging Market | Glg Intl vs. Astor Longshort Fund | Glg Intl vs. Rational Dividend Capture | Glg Intl vs. Rbc Emerging Markets |
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 Correlations module to find global opportunities by holding instruments from different markets.
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