Correlation Between Ab Municipal and Vulcan Value
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Vulcan Value 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 Vulcan Value 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 Vulcan Value Partners, you can compare the effects of market volatilities on Ab Municipal and Vulcan Value 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 Vulcan Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Vulcan Value.
Diversification Opportunities for Ab Municipal and Vulcan Value
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AUNCX and Vulcan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Vulcan Value Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Value Partners 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 Vulcan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Value Partners has no effect on the direction of Ab Municipal i.e., Ab Municipal and Vulcan Value go up and down completely randomly.
Pair Corralation between Ab Municipal and Vulcan Value
Assuming the 90 days horizon Ab Municipal is expected to generate 6.62 times less return on investment than Vulcan Value. But when comparing it to its historical volatility, Ab Municipal Bond is 10.13 times less risky than Vulcan Value. It trades about 0.23 of its potential returns per unit of risk. Vulcan Value Partners is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,183 in Vulcan Value Partners on May 27, 2025 and sell it today you would earn a total of 127.00 from holding Vulcan Value Partners or generate 10.74% 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. Vulcan Value Partners
Performance |
| Timeline |
| Ab Municipal Bond |
| Vulcan Value Partners |
Ab Municipal and Vulcan Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Vulcan Value
The main advantage of trading using opposite Ab Municipal and Vulcan Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Vulcan Value 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 Vulcan Value will offset losses from the drop in Vulcan Value's long position.| Ab Municipal vs. Fidelity Flex Servative | Ab Municipal vs. Barings Active Short | Ab Municipal vs. Aamhimco Short Duration | Ab Municipal vs. Massmutual Premier Short Duration |
| Vulcan Value vs. Qs Moderate Growth | Vulcan Value vs. Eagle Growth Income | Vulcan Value vs. L Abbett Growth | Vulcan Value vs. Old Westbury Large |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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