Correlation Between Oklahoma College and First Trust
Can any of the company-specific risk be diversified away by investing in both Oklahoma College and First Trust 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 Oklahoma College and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oklahoma College Savings and First Trust Preferred, you can compare the effects of market volatilities on Oklahoma College and First Trust 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 Oklahoma College with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma College and First Trust.
Diversification Opportunities for Oklahoma College and First Trust
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oklahoma and First is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma College Savings and First Trust Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Preferred and Oklahoma College 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 Oklahoma College Savings are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Preferred has no effect on the direction of Oklahoma College i.e., Oklahoma College and First Trust go up and down completely randomly.
Pair Corralation between Oklahoma College and First Trust
Assuming the 90 days horizon Oklahoma College Savings is expected to generate 1.53 times more return on investment than First Trust. However, Oklahoma College is 1.53 times more volatile than First Trust Preferred. It trades about 0.16 of its potential returns per unit of risk. First Trust Preferred is currently generating about -0.01 per unit of risk. If you would invest 1,009 in Oklahoma College Savings on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Oklahoma College Savings or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oklahoma College Savings vs. First Trust Preferred
Performance |
| Timeline |
| Oklahoma College Savings |
| First Trust Preferred |
Oklahoma College and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma College and First Trust
The main advantage of trading using opposite Oklahoma College and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma College position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Oklahoma College vs. Vanguard Total Stock | Oklahoma College vs. Vanguard 500 Index | Oklahoma College vs. Vanguard Total Stock | Oklahoma College vs. Vanguard Total Stock |
| First Trust vs. Inflation Protected Bond Fund | First Trust vs. Oklahoma College Savings | First Trust vs. Western Asset Inflation | First Trust vs. Ab Bond Inflation |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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