Correlation Between Structured Products and DTF Tax
Can any of the company-specific risk be diversified away by investing in both Structured Products and DTF Tax 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 Structured Products and DTF Tax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Structured Products Corp and DTF Tax Free, you can compare the effects of market volatilities on Structured Products and DTF Tax 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 Structured Products with a short position of DTF Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Structured Products and DTF Tax.
Diversification Opportunities for Structured Products and DTF Tax
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Structured and DTF is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Structured Products Corp and DTF Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DTF Tax Free and Structured Products 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 Structured Products Corp are associated (or correlated) with DTF Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DTF Tax Free has no effect on the direction of Structured Products i.e., Structured Products and DTF Tax go up and down completely randomly.
Pair Corralation between Structured Products and DTF Tax
Considering the 90-day investment horizon Structured Products Corp is expected to under-perform the DTF Tax. In addition to that, Structured Products is 3.4 times more volatile than DTF Tax Free. It trades about -0.04 of its total potential returns per unit of risk. DTF Tax Free is currently generating about 0.09 per unit of volatility. If you would invest 1,117 in DTF Tax Free on August 28, 2024 and sell it today you would earn a total of 9.00 from holding DTF Tax Free or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Structured Products Corp vs. DTF Tax Free
Performance |
| Timeline |
| Structured Products Corp |
| DTF Tax Free |
Structured Products and DTF Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Structured Products and DTF Tax
The main advantage of trading using opposite Structured Products and DTF Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Structured Products position performs unexpectedly, DTF Tax 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 DTF Tax will offset losses from the drop in DTF Tax's long position.| Structured Products vs. DBA Sempra 5750 | Structured Products vs. CMS Energy Corp | Structured Products vs. American Financial Group | Structured Products vs. Maiden Holdings North |
| DTF Tax vs. PowerUp Acquisition Corp | DTF Tax vs. Aurora Innovation | DTF Tax vs. HUMANA INC | DTF Tax vs. Aquagold International |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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