Correlation Between Oklahoma Municipal and Maine Municipal
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Maine 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 Oklahoma Municipal and Maine Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oklahoma Municipal Fund and Maine Municipal Fund, you can compare the effects of market volatilities on Oklahoma Municipal and Maine 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 Oklahoma Municipal with a short position of Maine Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Maine Municipal.
Diversification Opportunities for Oklahoma Municipal and Maine Municipal
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oklahoma and Maine is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Maine Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maine Municipal and Oklahoma Municipal 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 Oklahoma Municipal Fund are associated (or correlated) with Maine Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maine Municipal has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Maine Municipal go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Maine Municipal
Assuming the 90 days horizon Oklahoma Municipal Fund is expected to generate 1.19 times more return on investment than Maine Municipal. However, Oklahoma Municipal is 1.19 times more volatile than Maine Municipal Fund. It trades about 0.18 of its potential returns per unit of risk. Maine Municipal Fund is currently generating about 0.08 per unit of risk. If you would invest 1,033 in Oklahoma Municipal Fund on December 11, 2024 and sell it today you would earn a total of 19.00 from holding Oklahoma Municipal Fund or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Maine Municipal Fund
Performance |
| Timeline |
| Oklahoma Municipal |
| Maine Municipal |
Oklahoma Municipal and Maine Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Maine Municipal
The main advantage of trading using opposite Oklahoma Municipal and Maine Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Maine 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 Maine Municipal will offset losses from the drop in Maine Municipal's long position.| Oklahoma Municipal vs. Catholic Responsible Investments | Oklahoma Municipal vs. Allianzgi Nfj Mid Cap | Oklahoma Municipal vs. Ashmore Emerging Markets | Oklahoma Municipal vs. Federated Mdt Mid Cap |
| Maine Municipal vs. Crafword Dividend Growth | Maine Municipal vs. Upright Growth Income | Maine Municipal vs. Stringer Growth Fund | Maine Municipal vs. Massmutual Retiresmart Growth |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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