Correlation Between Cavanal Hill and Moderate Duration
Can any of the company-specific risk be diversified away by investing in both Cavanal Hill and Moderate Duration 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 Cavanal Hill and Moderate Duration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cavanal Hill Ultra and Moderate Duration Fund, you can compare the effects of market volatilities on Cavanal Hill and Moderate Duration 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 Cavanal Hill with a short position of Moderate Duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cavanal Hill and Moderate Duration.
Diversification Opportunities for Cavanal Hill and Moderate Duration
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cavanal and Moderate is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cavanal Hill Ultra and Moderate Duration Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderate Duration and Cavanal Hill 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 Cavanal Hill Ultra are associated (or correlated) with Moderate Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderate Duration has no effect on the direction of Cavanal Hill i.e., Cavanal Hill and Moderate Duration go up and down completely randomly.
Pair Corralation between Cavanal Hill and Moderate Duration
Assuming the 90 days horizon Cavanal Hill is expected to generate 1.76 times less return on investment than Moderate Duration. But when comparing it to its historical volatility, Cavanal Hill Ultra is 4.13 times less risky than Moderate Duration. It trades about 0.22 of its potential returns per unit of risk. Moderate Duration Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 915.00 in Moderate Duration Fund on August 31, 2024 and sell it today you would earn a total of 70.00 from holding Moderate Duration Fund or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.83% |
| Values | Daily Returns |
Cavanal Hill Ultra vs. Moderate Duration Fund
Performance |
| Timeline |
| Cavanal Hill Ultra |
| Moderate Duration |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cavanal Hill and Moderate Duration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cavanal Hill and Moderate Duration
The main advantage of trading using opposite Cavanal Hill and Moderate Duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cavanal Hill position performs unexpectedly, Moderate Duration 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 Moderate Duration will offset losses from the drop in Moderate Duration's long position.| Cavanal Hill vs. Calamos Dynamic Convertible | Cavanal Hill vs. Inflation Protected Bond Fund | Cavanal Hill vs. Blrc Sgy Mnp | Cavanal Hill vs. Touchstone Premium Yield |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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