Correlation Between Matson Money and Aquila Tax
Can any of the company-specific risk be diversified away by investing in both Matson Money and Aquila Tax 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 Matson Money and Aquila Tax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matson Money Equity and Aquila Tax Free Trust, you can compare the effects of market volatilities on Matson Money and Aquila Tax 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 Matson Money with a short position of Aquila Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Aquila Tax.
Diversification Opportunities for Matson Money and Aquila Tax
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Matson and Aquila is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and Aquila Tax Free Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Tax Free and Matson Money 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 Matson Money Equity are associated (or correlated) with Aquila Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Tax Free has no effect on the direction of Matson Money i.e., Matson Money and Aquila Tax go up and down completely randomly.
Pair Corralation between Matson Money and Aquila Tax
Assuming the 90 days horizon Matson Money Equity is expected to generate 8.11 times more return on investment than Aquila Tax. However, Matson Money is 8.11 times more volatile than Aquila Tax Free Trust. It trades about 0.08 of its potential returns per unit of risk. Aquila Tax Free Trust is currently generating about 0.02 per unit of risk. If you would invest 3,089 in Matson Money Equity on September 12, 2024 and sell it today you would earn a total of 614.00 from holding Matson Money Equity or generate 19.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 59.92% |
| Values | Daily Returns |
Matson Money Equity vs. Aquila Tax Free Trust
Performance |
| Timeline |
| Matson Money Equity |
| Aquila Tax Free |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Matson Money and Aquila Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matson Money and Aquila Tax
The main advantage of trading using opposite Matson Money and Aquila Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money position performs unexpectedly, Aquila Tax 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 Aquila Tax will offset losses from the drop in Aquila Tax's long position.| Matson Money vs. Vanguard Total Stock | Matson Money vs. Vanguard 500 Index | Matson Money vs. Vanguard Total Stock | Matson Money vs. Vanguard Total Stock |
| Aquila Tax vs. Chestnut Street Exchange | Aquila Tax vs. Matson Money Equity | Aquila Tax vs. Aig Government Money | Aquila Tax vs. Franklin Government Money |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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