Correlation Between Kansas Municipal and American Independence
Can any of the company-specific risk be diversified away by investing in both Kansas Municipal and American Independence 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 American Independence 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 American Independence Kansas, you can compare the effects of market volatilities on Kansas Municipal and American Independence 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 American Independence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kansas Municipal and American Independence.
Diversification Opportunities for Kansas Municipal and American Independence
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kansas and American is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Kansas Municipal Fund and American Independence Kansas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Independence 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 American Independence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Independence has no effect on the direction of Kansas Municipal i.e., Kansas Municipal and American Independence go up and down completely randomly.
Pair Corralation between Kansas Municipal and American Independence
Assuming the 90 days horizon Kansas Municipal Fund is expected to under-perform the American Independence. In addition to that, Kansas Municipal is 1.48 times more volatile than American Independence Kansas. It trades about 0.0 of its total potential returns per unit of risk. American Independence Kansas is currently generating about 0.04 per unit of volatility. If you would invest 1,010 in American Independence Kansas on August 28, 2024 and sell it today you would earn a total of 5.00 from holding American Independence Kansas or generate 0.5% 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. American Independence Kansas
Performance |
| Timeline |
| Kansas Municipal |
| American Independence |
Kansas Municipal and American Independence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kansas Municipal and American Independence
The main advantage of trading using opposite Kansas Municipal and American Independence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kansas Municipal position performs unexpectedly, American Independence 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 American Independence will offset losses from the drop in American Independence's long position.| Kansas Municipal vs. Integrity Dividend Summit | Kansas Municipal vs. Integrity Dividend Summit | Kansas Municipal vs. Williston Basinmid North America | Kansas Municipal vs. Williston Basinmid North America |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |