Correlation Between Ab Municipal and Western Asset
Can any of the company-specific risk be diversified away by investing in both Ab Municipal and Western Asset 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 Western Asset 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 Western Asset Municipal, you can compare the effects of market volatilities on Ab Municipal and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Western Asset.
Diversification Opportunities for Ab Municipal and Western Asset
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AUNYX and Western is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Municipal has no effect on the direction of Ab Municipal i.e., Ab Municipal and Western Asset go up and down completely randomly.
Pair Corralation between Ab Municipal and Western Asset
Assuming the 90 days horizon Ab Municipal is expected to generate 1.18 times less return on investment than Western Asset. But when comparing it to its historical volatility, Ab Municipal Bond is 1.65 times less risky than Western Asset. It trades about 0.33 of its potential returns per unit of risk. Western Asset Municipal is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 680.00 in Western Asset Municipal on August 18, 2025 and sell it today you would earn a total of 21.00 from holding Western Asset Municipal or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Municipal Bond vs. Western Asset Municipal
Performance |
| Timeline |
| Ab Municipal Bond |
| Western Asset Municipal |
Ab Municipal and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Municipal and Western Asset
The main advantage of trading using opposite Ab Municipal and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Ab Municipal vs. Qs Large Cap | Ab Municipal vs. Franklin Mutual Global | Ab Municipal vs. Pnc Balanced Allocation | Ab Municipal vs. Ab Global Risk |
| Western Asset vs. Franklin Small Cap | Western Asset vs. Smallcap Fund Fka | Western Asset vs. Scout Small Cap | Western Asset vs. Eagle Small Cap |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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