Correlation Between Kentucky Tax-free and Sparta Capital
Can any of the company-specific risk be diversified away by investing in both Kentucky Tax-free and Sparta Capital 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-free and Sparta Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kentucky Tax Free Income and Sparta Capital, you can compare the effects of market volatilities on Kentucky Tax-free and Sparta Capital 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-free with a short position of Sparta Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kentucky Tax-free and Sparta Capital.
Diversification Opportunities for Kentucky Tax-free and Sparta Capital
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kentucky and Sparta is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kentucky Tax Free Income and Sparta Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparta Capital and Kentucky 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 Kentucky Tax Free Income are associated (or correlated) with Sparta Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparta Capital has no effect on the direction of Kentucky Tax-free i.e., Kentucky Tax-free and Sparta Capital go up and down completely randomly.
Pair Corralation between Kentucky Tax-free and Sparta Capital
Assuming the 90 days horizon Kentucky Tax Free Income is expected to generate 0.06 times more return on investment than Sparta Capital. However, Kentucky Tax Free Income is 16.82 times less risky than Sparta Capital. It trades about 0.11 of its potential returns per unit of risk. Sparta Capital is currently generating about -0.21 per unit of risk. If you would invest 718.00 in Kentucky Tax Free Income on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Kentucky Tax Free Income or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kentucky Tax Free Income vs. Sparta Capital
Performance |
| Timeline |
| Kentucky Tax Free |
| Sparta Capital |
Kentucky Tax-free and Sparta Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kentucky Tax-free and Sparta Capital
The main advantage of trading using opposite Kentucky Tax-free and Sparta Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kentucky Tax-free position performs unexpectedly, Sparta Capital 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 Sparta Capital will offset losses from the drop in Sparta Capital's long position.| Kentucky Tax-free vs. Kentucky Tax Free Short To Medium | Kentucky Tax-free vs. North Carolina Tax Free | Kentucky Tax-free vs. Intermediate Government Bond | Kentucky Tax-free vs. Taxable Municipal Bond |
| Sparta Capital vs. Copa Holdings SA | Sparta Capital vs. United Airlines Holdings | Sparta Capital vs. Delta Air Lines | Sparta Capital vs. SkyWest |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world |