Correlation Between Aquila Tax and Hawaiian Tax-free
Can any of the company-specific risk be diversified away by investing in both Aquila Tax and Hawaiian Tax-free 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 Aquila Tax and Hawaiian Tax-free into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquila Tax Free Fund and Hawaiian Tax Free Trust, you can compare the effects of market volatilities on Aquila Tax and Hawaiian Tax-free 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 Aquila Tax with a short position of Hawaiian Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquila Tax and Hawaiian Tax-free.
Diversification Opportunities for Aquila Tax and Hawaiian Tax-free
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aquila and Hawaiian is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Aquila Tax Free Fund and Hawaiian Tax Free Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Tax Free and Aquila Tax 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 Aquila Tax Free Fund are associated (or correlated) with Hawaiian Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Tax Free has no effect on the direction of Aquila Tax i.e., Aquila Tax and Hawaiian Tax-free go up and down completely randomly.
Pair Corralation between Aquila Tax and Hawaiian Tax-free
Assuming the 90 days horizon Aquila Tax is expected to generate 1.49 times less return on investment than Hawaiian Tax-free. But when comparing it to its historical volatility, Aquila Tax Free Fund is 1.08 times less risky than Hawaiian Tax-free. It trades about 0.13 of its potential returns per unit of risk. Hawaiian Tax Free Trust is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 973.00 in Hawaiian Tax Free Trust on August 25, 2024 and sell it today you would earn a total of 83.00 from holding Hawaiian Tax Free Trust or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquila Tax Free Fund vs. Hawaiian Tax Free Trust
Performance |
| Timeline |
| Aquila Tax Free |
| Hawaiian Tax Free |
Aquila Tax and Hawaiian Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquila Tax and Hawaiian Tax-free
The main advantage of trading using opposite Aquila Tax and Hawaiian Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquila Tax position performs unexpectedly, Hawaiian Tax-free 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 Hawaiian Tax-free will offset losses from the drop in Hawaiian Tax-free's long position.| Aquila Tax vs. Vanguard Institutional Short Term | Aquila Tax vs. Nuveen Short Term | Aquila Tax vs. Jhancock Short Duration | Aquila Tax vs. Touchstone Ultra Short |
| Hawaiian Tax-free vs. Blackrock Funds Iii | Hawaiian Tax-free vs. Chestnut Street Exchange | Hawaiian Tax-free vs. Ubs Money Series | Hawaiian Tax-free vs. Aim Investment Secs |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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