Correlation Between Oaktree Diversifiedome and California Municipal
Can any of the company-specific risk be diversified away by investing in both Oaktree Diversifiedome and California Municipal 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 Oaktree Diversifiedome and California Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oaktree Diversifiedome and California Municipal Fund, you can compare the effects of market volatilities on Oaktree Diversifiedome and California Municipal 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 Oaktree Diversifiedome with a short position of California Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oaktree Diversifiedome and California Municipal.
Diversification Opportunities for Oaktree Diversifiedome and California Municipal
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Oaktree and California is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Oaktree Diversifiedome and California Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Municipal and Oaktree Diversifiedome 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 Oaktree Diversifiedome are associated (or correlated) with California Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Municipal has no effect on the direction of Oaktree Diversifiedome i.e., Oaktree Diversifiedome and California Municipal go up and down completely randomly.
Pair Corralation between Oaktree Diversifiedome and California Municipal
Assuming the 90 days horizon Oaktree Diversifiedome is expected to generate 0.54 times more return on investment than California Municipal. However, Oaktree Diversifiedome is 1.84 times less risky than California Municipal. It trades about 0.51 of its potential returns per unit of risk. California Municipal Fund is currently generating about 0.08 per unit of risk. If you would invest 834.00 in Oaktree Diversifiedome on September 14, 2024 and sell it today you would earn a total of 98.00 from holding Oaktree Diversifiedome or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Oaktree Diversifiedome vs. California Municipal Fund
Performance |
| Timeline |
| Oaktree Diversifiedome |
| California Municipal |
Oaktree Diversifiedome and California Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oaktree Diversifiedome and California Municipal
The main advantage of trading using opposite Oaktree Diversifiedome and California Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oaktree Diversifiedome position performs unexpectedly, California Municipal 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 California Municipal will offset losses from the drop in California Municipal's long position.| Oaktree Diversifiedome vs. Vanguard Total Stock | Oaktree Diversifiedome vs. Vanguard 500 Index | Oaktree Diversifiedome vs. Vanguard Total Stock | Oaktree Diversifiedome vs. Vanguard Total Stock |
| California Municipal vs. Multimedia Portfolio Multimedia | California Municipal vs. Artisan Select Equity | California Municipal vs. Scharf Fund Retail | California Municipal vs. Gmo Global Equity |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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