Correlation Between Ishares Municipal and Oklahoma Municipal
Can any of the company-specific risk be diversified away by investing in both Ishares Municipal and Oklahoma Municipal 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 Ishares Municipal and Oklahoma Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ishares Municipal Bond and Oklahoma Municipal Fund, you can compare the effects of market volatilities on Ishares Municipal and Oklahoma Municipal 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 Ishares Municipal with a short position of Oklahoma Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Municipal and Oklahoma Municipal.
Diversification Opportunities for Ishares Municipal and Oklahoma Municipal
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ishares and Oklahoma is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and Oklahoma Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma Municipal and Ishares 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 Ishares Municipal Bond are associated (or correlated) with Oklahoma Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oklahoma Municipal has no effect on the direction of Ishares Municipal i.e., Ishares Municipal and Oklahoma Municipal go up and down completely randomly.
Pair Corralation between Ishares Municipal and Oklahoma Municipal
Assuming the 90 days horizon Ishares Municipal Bond is expected to generate 1.0 times more return on investment than Oklahoma Municipal. However, Ishares Municipal Bond is 1.0 times less risky than Oklahoma Municipal. It trades about 0.06 of its potential returns per unit of risk. Oklahoma Municipal Fund is currently generating about 0.04 per unit of risk. If you would invest 1,037 in Ishares Municipal Bond on August 24, 2024 and sell it today you would earn a total of 71.00 from holding Ishares Municipal Bond or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ishares Municipal Bond vs. Oklahoma Municipal Fund
Performance |
| Timeline |
| Ishares Municipal Bond |
| Oklahoma Municipal |
Ishares Municipal and Oklahoma Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ishares Municipal and Oklahoma Municipal
The main advantage of trading using opposite Ishares Municipal and Oklahoma Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Municipal position performs unexpectedly, Oklahoma Municipal 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 Oklahoma Municipal will offset losses from the drop in Oklahoma Municipal's long position.| Ishares Municipal vs. Balanced Fund Retail | Ishares Municipal vs. Cutler Equity | Ishares Municipal vs. Vanguard Telecommunication Services | Ishares Municipal vs. Rbc Global Equity |
| Oklahoma Municipal vs. Kinetics Global Fund | Oklahoma Municipal vs. Barings Global Floating | Oklahoma Municipal vs. Ab Global Bond | Oklahoma Municipal vs. Commonwealth Global Fund |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |