Correlation Between Kansas Municipal and Nebraska Municipal
Can any of the company-specific risk be diversified away by investing in both Kansas Municipal 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 Kansas Municipal and Nebraska Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kansas Municipal Fund and Nebraska Municipal Fund, you can compare the effects of market volatilities on Kansas Municipal 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 Kansas Municipal with a short position of Nebraska Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kansas Municipal and Nebraska Municipal.
Diversification Opportunities for Kansas Municipal and Nebraska Municipal
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Kansas and Nebraska is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Kansas Municipal Fund and Nebraska Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebraska Municipal and Kansas 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 Kansas Municipal Fund 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 Kansas Municipal i.e., Kansas Municipal and Nebraska Municipal go up and down completely randomly.
Pair Corralation between Kansas Municipal and Nebraska Municipal
Assuming the 90 days horizon Kansas Municipal Fund is expected to generate 0.99 times more return on investment than Nebraska Municipal. However, Kansas Municipal Fund is 1.01 times less risky than Nebraska Municipal. It trades about 0.01 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 944.00 in Kansas Municipal Fund on November 2, 2024 and sell it today you would earn a total of 11.00 from holding Kansas Municipal Fund or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kansas Municipal Fund vs. Nebraska Municipal Fund
Performance |
| Timeline |
| Kansas Municipal |
| Nebraska Municipal |
Kansas Municipal and Nebraska Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kansas Municipal and Nebraska Municipal
The main advantage of trading using opposite Kansas Municipal and Nebraska Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kansas Municipal 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.| Kansas Municipal vs. Abbey Capital Futures | Kansas Municipal vs. Asg Managed Futures | Kansas Municipal vs. Ab Bond Inflation | Kansas Municipal vs. Credit Suisse Multialternative |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |