Correlation Between Kentucky Tax and American Funds
Can any of the company-specific risk be diversified away by investing in both Kentucky Tax and American Funds 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 Kentucky Tax and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kentucky Tax Free Short To Medium and American Funds College, you can compare the effects of market volatilities on Kentucky Tax and American Funds 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 Kentucky Tax with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kentucky Tax and American Funds.
Diversification Opportunities for Kentucky Tax and American Funds
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kentucky and American is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kentucky Tax Free Short To Med and American Funds College in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds College and Kentucky Tax 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 Kentucky Tax Free Short To Medium are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds College has no effect on the direction of Kentucky Tax i.e., Kentucky Tax and American Funds go up and down completely randomly.
Pair Corralation between Kentucky Tax and American Funds
Assuming the 90 days horizon Kentucky Tax is expected to generate 211.0 times less return on investment than American Funds. But when comparing it to its historical volatility, Kentucky Tax Free Short To Medium is 4.19 times less risky than American Funds. It trades about 0.0 of its potential returns per unit of risk. American Funds College is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,206 in American Funds College on September 13, 2024 and sell it today you would earn a total of 10.00 from holding American Funds College or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kentucky Tax Free Short To Med vs. American Funds College
Performance |
| Timeline |
| Kentucky Tax Free |
| American Funds College |
Kentucky Tax and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kentucky Tax and American Funds
The main advantage of trading using opposite Kentucky Tax and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kentucky Tax position performs unexpectedly, American Funds 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 Funds will offset losses from the drop in American Funds' long position.| Kentucky Tax vs. North Carolina Tax Free | Kentucky Tax vs. Intermediate Government Bond | Kentucky Tax vs. Tennessee Tax Free Income | Kentucky Tax vs. Mississippi Tax Free Income |
| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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