Correlation Between Ab Municipal and Pace International
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Pace International 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 Pace International 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 Pace International Emerging, you can compare the effects of market volatilities on Ab Municipal and Pace International 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 Pace International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Pace International.
Diversification Opportunities for Ab Municipal and Pace International
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AUNCX and Pace is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Pace International Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace International 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 Pace International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace International has no effect on the direction of Ab Municipal i.e., Ab Municipal and Pace International go up and down completely randomly.
Pair Corralation between Ab Municipal and Pace International
Assuming the 90 days horizon Ab Municipal is expected to generate 14.26 times less return on investment than Pace International. But when comparing it to its historical volatility, Ab Municipal Bond is 5.27 times less risky than Pace International. It trades about 0.13 of its potential returns per unit of risk. Pace International Emerging is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,352 in Pace International Emerging on April 30, 2025 and sell it today you would earn a total of 193.00 from holding Pace International Emerging or generate 14.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Pace International Emerging
Performance |
| Timeline |
| Ab Municipal Bond |
| Pace International |
Ab Municipal and Pace International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Pace International
The main advantage of trading using opposite Ab Municipal and Pace International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Pace International 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 Pace International will offset losses from the drop in Pace International's long position.| Ab Municipal vs. Versatile Bond Portfolio | Ab Municipal vs. Rbb Fund | Ab Municipal vs. Champlain Mid Cap | Ab Municipal vs. Astor Star Fund |
| Pace International vs. Fidelity Advisor Health | Pace International vs. Highland Longshort Healthcare | Pace International vs. Alger Health Sciences | Pace International vs. Delaware Healthcare Fund |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |