Correlation Between Ab Municipal and Cref Inflation
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Cref Inflation 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 Cref Inflation 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 Cref Inflation Linked Bond, you can compare the effects of market volatilities on Ab Municipal and Cref Inflation 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 Cref Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Cref Inflation.
Diversification Opportunities for Ab Municipal and Cref Inflation
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AUNCX and Cref is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Cref Inflation Linked Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Inflation Linked 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 Cref Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Inflation Linked has no effect on the direction of Ab Municipal i.e., Ab Municipal and Cref Inflation go up and down completely randomly.
Pair Corralation between Ab Municipal and Cref Inflation
Assuming the 90 days horizon Ab Municipal Bond is expected to generate 0.67 times more return on investment than Cref Inflation. However, Ab Municipal Bond is 1.5 times less risky than Cref Inflation. It trades about 0.04 of its potential returns per unit of risk. Cref Inflation Linked Bond is currently generating about -0.01 per unit of risk. If you would invest 1,085 in Ab Municipal Bond on September 13, 2025 and sell it today you would earn a total of 2.00 from holding Ab Municipal Bond or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Cref Inflation Linked Bond
Performance |
| Timeline |
| Ab Municipal Bond |
| Cref Inflation Linked |
Ab Municipal and Cref Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Cref Inflation
The main advantage of trading using opposite Ab Municipal and Cref Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Cref Inflation 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 Cref Inflation will offset losses from the drop in Cref Inflation's long position.| Ab Municipal vs. Mh Elite Fund | Ab Municipal vs. Pnc Balanced Allocation | Ab Municipal vs. Qs Global Equity | Ab Municipal vs. Omni Small Cap Value |
| Cref Inflation vs. Vanguard Total Stock | Cref Inflation vs. Vanguard 500 Index | Cref Inflation vs. Vanguard Total Stock | Cref Inflation vs. Vanguard Total Stock |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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