Correlation Between Ab Global and Oklahoma Municipal
Can any of the company-specific risk be diversified away by investing in both Ab Global 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 Ab Global and Oklahoma Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Risk and Oklahoma Municipal Fund, you can compare the effects of market volatilities on Ab Global 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 Ab Global with a short position of Oklahoma Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Oklahoma Municipal.
Diversification Opportunities for Ab Global and Oklahoma Municipal
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CBSYX and Oklahoma is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Oklahoma Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma Municipal and Ab Global 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 Ab Global Risk 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 Ab Global i.e., Ab Global and Oklahoma Municipal go up and down completely randomly.
Pair Corralation between Ab Global and Oklahoma Municipal
Assuming the 90 days horizon Ab Global Risk is expected to generate 2.17 times more return on investment than Oklahoma Municipal. However, Ab Global is 2.17 times more volatile than Oklahoma Municipal Fund. It trades about 0.05 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 1,582 in Ab Global Risk on August 29, 2024 and sell it today you would earn a total of 214.00 from holding Ab Global Risk or generate 13.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Oklahoma Municipal Fund
Performance |
| Timeline |
| Ab Global Risk |
| Oklahoma Municipal |
Ab Global and Oklahoma Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Oklahoma Municipal
The main advantage of trading using opposite Ab Global and Oklahoma Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global 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.| Ab Global vs. All Asset Fund | Ab Global vs. HUMANA INC | Ab Global vs. Aquagold International | Ab Global vs. Barloworld Ltd ADR |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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