Correlation Between Hawaiian Tax-free and Nebraska Municipal
Can any of the company-specific risk be diversified away by investing in both Hawaiian Tax-free and Nebraska 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 Hawaiian Tax-free and Nebraska Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Tax Free Trust and Nebraska Municipal Fund, you can compare the effects of market volatilities on Hawaiian Tax-free and Nebraska 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 Hawaiian Tax-free with a short position of Nebraska Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Tax-free and Nebraska Municipal.
Diversification Opportunities for Hawaiian Tax-free and Nebraska Municipal
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hawaiian and Nebraska is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Tax Free Trust and Nebraska Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebraska Municipal and Hawaiian Tax-free 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 Hawaiian Tax Free Trust are associated (or correlated) with Nebraska Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebraska Municipal has no effect on the direction of Hawaiian Tax-free i.e., Hawaiian Tax-free and Nebraska Municipal go up and down completely randomly.
Pair Corralation between Hawaiian Tax-free and Nebraska Municipal
Assuming the 90 days horizon Hawaiian Tax Free Trust is expected to generate 0.78 times more return on investment than Nebraska Municipal. However, Hawaiian Tax Free Trust is 1.28 times less risky than Nebraska Municipal. It trades about 0.04 of its potential returns per unit of risk. Nebraska Municipal Fund is currently generating about 0.01 per unit of risk. If you would invest 1,013 in Hawaiian Tax Free Trust on November 2, 2024 and sell it today you would earn a total of 39.00 from holding Hawaiian Tax Free Trust or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawaiian Tax Free Trust vs. Nebraska Municipal Fund
Performance |
| Timeline |
| Hawaiian Tax Free |
| Nebraska Municipal |
Hawaiian Tax-free and Nebraska Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Tax-free and Nebraska Municipal
The main advantage of trading using opposite Hawaiian Tax-free and Nebraska Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Tax-free position performs unexpectedly, Nebraska 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 Nebraska Municipal will offset losses from the drop in Nebraska Municipal's long position.| Hawaiian Tax-free vs. Oppenheimer Gold Special | Hawaiian Tax-free vs. James Balanced Golden | Hawaiian Tax-free vs. Great West Goldman Sachs | Hawaiian Tax-free vs. James Balanced Golden |
| Nebraska Municipal vs. Commonwealth Global Fund | Nebraska Municipal vs. Barings Global Floating | Nebraska Municipal vs. Rbb Fund | Nebraska Municipal vs. Qs Global Equity |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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