Correlation Between Live Oak and Tax Exempt
Can any of the company-specific risk be diversified away by investing in both Live Oak and Tax Exempt 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 Live Oak and Tax Exempt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Health and Tax Exempt Intermediate Term, you can compare the effects of market volatilities on Live Oak and Tax Exempt 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 Live Oak with a short position of Tax Exempt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Tax Exempt.
Diversification Opportunities for Live Oak and Tax Exempt
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Live and Tax is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Tax Exempt Intermediate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tax Exempt Intermediate and Live Oak 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 Live Oak Health are associated (or correlated) with Tax Exempt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tax Exempt Intermediate has no effect on the direction of Live Oak i.e., Live Oak and Tax Exempt go up and down completely randomly.
Pair Corralation between Live Oak and Tax Exempt
Assuming the 90 days horizon Live Oak is expected to generate 12.86 times less return on investment than Tax Exempt. In addition to that, Live Oak is 3.99 times more volatile than Tax Exempt Intermediate Term. It trades about 0.0 of its total potential returns per unit of risk. Tax Exempt Intermediate Term is currently generating about 0.1 per unit of volatility. If you would invest 1,164 in Tax Exempt Intermediate Term on September 12, 2024 and sell it today you would earn a total of 107.00 from holding Tax Exempt Intermediate Term or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Tax Exempt Intermediate Term
Performance |
| Timeline |
| Live Oak Health |
| Tax Exempt Intermediate |
Live Oak and Tax Exempt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Tax Exempt
The main advantage of trading using opposite Live Oak and Tax Exempt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Tax Exempt 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 Tax Exempt will offset losses from the drop in Tax Exempt's long position.| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
| Tax Exempt vs. Health Biotchnology Portfolio | Tax Exempt vs. Vanguard Health Care | Tax Exempt vs. Delaware Healthcare Fund | Tax Exempt vs. Live Oak Health |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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