Correlation Between Barloworld and Oklahoma Municipal
Can any of the company-specific risk be diversified away by investing in both Barloworld 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 Barloworld and Oklahoma Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barloworld Ltd ADR and Oklahoma Municipal Fund, you can compare the effects of market volatilities on Barloworld 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 Barloworld with a short position of Oklahoma Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Oklahoma Municipal.
Diversification Opportunities for Barloworld and Oklahoma Municipal
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barloworld and Oklahoma is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Oklahoma Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma Municipal and Barloworld 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 Barloworld Ltd ADR 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 Barloworld i.e., Barloworld and Oklahoma Municipal go up and down completely randomly.
Pair Corralation between Barloworld and Oklahoma Municipal
Assuming the 90 days horizon Barloworld Ltd ADR is expected to under-perform the Oklahoma Municipal. In addition to that, Barloworld is 13.31 times more volatile than Oklahoma Municipal Fund. It trades about -0.01 of its total potential returns per unit of risk. Oklahoma Municipal Fund is currently generating about 0.12 per unit of volatility. If you would invest 1,026 in Oklahoma Municipal Fund on August 29, 2024 and sell it today you would earn a total of 40.00 from holding Oklahoma Municipal Fund or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Oklahoma Municipal Fund
Performance |
| Timeline |
| Barloworld ADR |
| Oklahoma Municipal |
Barloworld and Oklahoma Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Oklahoma Municipal
The main advantage of trading using opposite Barloworld and Oklahoma Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld 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.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Oklahoma Municipal vs. Virginia Bond Fund | Oklahoma Municipal vs. HUMANA INC | Oklahoma Municipal vs. Aquagold International | Oklahoma Municipal vs. Barloworld Ltd ADR |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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