Correlation Between Hartford Municipal and Oklahoma Municipal
Can any of the company-specific risk be diversified away by investing in both Hartford Municipal 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 Hartford Municipal and Oklahoma Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Municipal and Oklahoma Municipal Fund, you can compare the effects of market volatilities on Hartford Municipal 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 Hartford Municipal with a short position of Oklahoma Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Municipal and Oklahoma Municipal.
Diversification Opportunities for Hartford Municipal and Oklahoma Municipal
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hartford and Oklahoma is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Municipal and Oklahoma Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma Municipal and Hartford Municipal 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 The Hartford Municipal 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 Hartford Municipal i.e., Hartford Municipal and Oklahoma Municipal go up and down completely randomly.
Pair Corralation between Hartford Municipal and Oklahoma Municipal
Assuming the 90 days horizon Hartford Municipal is expected to generate 1.76 times less return on investment than Oklahoma Municipal. But when comparing it to its historical volatility, The Hartford Municipal is 1.42 times less risky than Oklahoma Municipal. It trades about 0.18 of its potential returns per unit of risk. Oklahoma Municipal Fund is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,049 in Oklahoma Municipal Fund on September 1, 2024 and sell it today you would earn a total of 17.00 from holding Oklahoma Municipal Fund or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Hartford Municipal vs. Oklahoma Municipal Fund
Performance |
| Timeline |
| The Hartford Municipal |
| Oklahoma Municipal |
Hartford Municipal and Oklahoma Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Municipal and Oklahoma Municipal
The main advantage of trading using opposite Hartford Municipal and Oklahoma Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Municipal 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.| Hartford Municipal vs. Great West Real Estate | Hartford Municipal vs. Deutsche Real Estate | Hartford Municipal vs. Msif Real Estate | Hartford Municipal vs. Simt Real Estate |
| Oklahoma Municipal vs. Mesirow Financial Small | Oklahoma Municipal vs. Transamerica Financial Life | Oklahoma Municipal vs. 1919 Financial Services | Oklahoma Municipal vs. Angel Oak Financial |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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