Correlation Between Ab Municipal and Pace Municipal
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Pace Municipal 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 Municipal 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 Municipal Fixed, you can compare the effects of market volatilities on Ab Municipal and Pace Municipal 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 Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Pace Municipal.
Diversification Opportunities for Ab Municipal and Pace Municipal
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AUNCX and Pace is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Pace Municipal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Municipal Fixed 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 Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Municipal Fixed has no effect on the direction of Ab Municipal i.e., Ab Municipal and Pace Municipal go up and down completely randomly.
Pair Corralation between Ab Municipal and Pace Municipal
Assuming the 90 days horizon Ab Municipal Bond is expected to generate 1.08 times more return on investment than Pace Municipal. However, Ab Municipal is 1.08 times more volatile than Pace Municipal Fixed. It trades about 0.17 of its potential returns per unit of risk. Pace Municipal Fixed is currently generating about 0.17 per unit of risk. If you would invest 1,052 in Ab Municipal Bond on April 24, 2025 and sell it today you would earn a total of 14.00 from holding Ab Municipal Bond or generate 1.33% 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 Municipal Fixed
Performance |
| Timeline |
| Ab Municipal Bond |
| Pace Municipal Fixed |
Ab Municipal and Pace Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Pace Municipal
The main advantage of trading using opposite Ab Municipal and Pace Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Pace Municipal 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 Municipal will offset losses from the drop in Pace Municipal's long position.| Ab Municipal vs. Short Duration Inflation | Ab Municipal vs. Lincoln Inflation Plus | Ab Municipal vs. Ab Bond Inflation | Ab Municipal vs. Ab Bond Inflation |
| Pace Municipal vs. Fidelity Advisor Technology | Pace Municipal vs. Janus Global Technology | Pace Municipal vs. Dreyfus Technology Growth | Pace Municipal vs. Allianzgi Technology 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |