Correlation Between High-yield Municipal and Kosmos Energy
Can any of the company-specific risk be diversified away by investing in both High-yield Municipal and Kosmos Energy 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 High-yield Municipal and Kosmos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Municipal Fund and Kosmos Energy, you can compare the effects of market volatilities on High-yield Municipal and Kosmos Energy 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 High-yield Municipal with a short position of Kosmos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of High-yield Municipal and Kosmos Energy.
Diversification Opportunities for High-yield Municipal and Kosmos Energy
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between High-yield and Kosmos is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and Kosmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kosmos Energy and High-yield 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 High Yield Municipal Fund are associated (or correlated) with Kosmos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kosmos Energy has no effect on the direction of High-yield Municipal i.e., High-yield Municipal and Kosmos Energy go up and down completely randomly.
Pair Corralation between High-yield Municipal and Kosmos Energy
Assuming the 90 days horizon High Yield Municipal Fund is expected to generate 0.1 times more return on investment than Kosmos Energy. However, High Yield Municipal Fund is 10.32 times less risky than Kosmos Energy. It trades about 0.07 of its potential returns per unit of risk. Kosmos Energy is currently generating about -0.01 per unit of risk. If you would invest 810.00 in High Yield Municipal Fund on August 24, 2024 and sell it today you would earn a total of 86.00 from holding High Yield Municipal Fund or generate 10.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Municipal Fund vs. Kosmos Energy
Performance |
| Timeline |
| High Yield Municipal |
| Kosmos Energy |
High-yield Municipal and Kosmos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High-yield Municipal and Kosmos Energy
The main advantage of trading using opposite High-yield Municipal and Kosmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High-yield Municipal position performs unexpectedly, Kosmos Energy 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 Kosmos Energy will offset losses from the drop in Kosmos Energy's long position.| High-yield Municipal vs. Munivest Fund | High-yield Municipal vs. Blackrock Muniholdings Quality | High-yield Municipal vs. DWS Municipal Income | High-yield Municipal vs. Blackrock Muniholdings Closed |
| Kosmos Energy vs. Matador Resources | Kosmos Energy vs. Murphy Oil | Kosmos Energy vs. Civitas Resources | Kosmos Energy vs. Magnolia Oil Gas |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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