Correlation Between Pace Municipal and Ab International
Can any of the company-specific risk be diversified away by investing in both Pace Municipal and Ab 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 Pace Municipal and Ab International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Municipal Fixed and Ab International Growth, you can compare the effects of market volatilities on Pace Municipal and Ab 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 Pace Municipal with a short position of Ab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and Ab International.
Diversification Opportunities for Pace Municipal and Ab International
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pace and AWPIX is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pace Municipal Fixed and Ab International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab International Growth and Pace 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 Pace Municipal Fixed are associated (or correlated) with Ab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab International Growth has no effect on the direction of Pace Municipal i.e., Pace Municipal and Ab International go up and down completely randomly.
Pair Corralation between Pace Municipal and Ab International
Assuming the 90 days horizon Pace Municipal Fixed is expected to under-perform the Ab International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pace Municipal Fixed is 3.48 times less risky than Ab International. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Ab International Growth is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,968 in Ab International Growth on April 2, 2025 and sell it today you would earn a total of 249.00 from holding Ab International Growth or generate 12.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Municipal Fixed vs. Ab International Growth
Performance |
| Timeline |
| Pace Municipal Fixed |
| Ab International Growth |
Pace Municipal and Ab International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Municipal and Ab International
The main advantage of trading using opposite Pace Municipal and Ab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Municipal position performs unexpectedly, Ab 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 Ab International will offset losses from the drop in Ab International's long position.| Pace Municipal vs. Ambrus Core Bond | Pace Municipal vs. Federated Municipal Ultrashort | Pace Municipal vs. Legg Mason Partners | Pace Municipal vs. Mh Elite Fund |
| Ab International vs. Fidelity Money Market | Ab International vs. Ab Global Bond | Ab International vs. Legg Mason Partners | Ab International vs. Prudential Government Money |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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