Correlation Between Hartford Municipal and Aquila Tax-free
Can any of the company-specific risk be diversified away by investing in both Hartford Municipal and Aquila 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 Hartford Municipal and Aquila Tax-free into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Municipal Income and Aquila Tax Free Fund, you can compare the effects of market volatilities on Hartford Municipal and Aquila 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 Hartford Municipal with a short position of Aquila Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Municipal and Aquila Tax-free.
Diversification Opportunities for Hartford Municipal and Aquila Tax-free
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Hartford and Aquila is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Municipal Income and Aquila Tax Free Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Tax Free 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 Hartford Municipal Income are associated (or correlated) with Aquila 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 Aquila Tax Free has no effect on the direction of Hartford Municipal i.e., Hartford Municipal and Aquila Tax-free go up and down completely randomly.
Pair Corralation between Hartford Municipal and Aquila Tax-free
Assuming the 90 days horizon Hartford Municipal Income is expected to generate 1.18 times more return on investment than Aquila Tax-free. However, Hartford Municipal is 1.18 times more volatile than Aquila Tax Free Fund. It trades about 0.06 of its potential returns per unit of risk. Aquila Tax Free Fund is currently generating about 0.06 per unit of risk. If you would invest 969.00 in Hartford Municipal Income on November 3, 2024 and sell it today you would earn a total of 30.00 from holding Hartford Municipal Income or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Municipal Income vs. Aquila Tax Free Fund
Performance |
| Timeline |
| Hartford Municipal Income |
| Aquila Tax Free |
Hartford Municipal and Aquila Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Municipal and Aquila Tax-free
The main advantage of trading using opposite Hartford Municipal and Aquila Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Municipal position performs unexpectedly, Aquila 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 Aquila Tax-free will offset losses from the drop in Aquila Tax-free's long position.| Hartford Municipal vs. Schwab Government Money | Hartford Municipal vs. Cref Money Market | Hartford Municipal vs. Davis Financial Fund | Hartford Municipal vs. 1919 Financial Services |
| Aquila Tax-free vs. Rational Dividend Capture | Aquila Tax-free vs. Wabmsx | Aquila Tax-free vs. Tax Managed Large Cap | Aquila Tax-free vs. Fkhemx |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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