Correlation Between Oklahoma Municipal and Alps/alerian Energy
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Alps/alerian Energy 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 Alps/alerian Energy 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 Alpsalerian Energy Infrastructure, you can compare the effects of market volatilities on Oklahoma Municipal and Alps/alerian Energy 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 Alps/alerian Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Alps/alerian Energy.
Diversification Opportunities for Oklahoma Municipal and Alps/alerian Energy
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oklahoma and Alps/alerian is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Alpsalerian Energy Infrastruct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alps/alerian Energy 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 Alps/alerian Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alps/alerian Energy has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Alps/alerian Energy go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Alps/alerian Energy
Assuming the 90 days horizon Oklahoma Municipal is expected to generate 6.45 times less return on investment than Alps/alerian Energy. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 2.86 times less risky than Alps/alerian Energy. It trades about 0.25 of its potential returns per unit of risk. Alpsalerian Energy Infrastructure is currently generating about 0.57 of returns per unit of risk over similar time horizon. If you would invest 1,415 in Alpsalerian Energy Infrastructure on August 30, 2024 and sell it today you would earn a total of 183.00 from holding Alpsalerian Energy Infrastructure or generate 12.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Alpsalerian Energy Infrastruct
Performance |
| Timeline |
| Oklahoma Municipal |
| Alps/alerian Energy |
Oklahoma Municipal and Alps/alerian Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Alps/alerian Energy
The main advantage of trading using opposite Oklahoma Municipal and Alps/alerian Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Alps/alerian Energy 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 Alps/alerian Energy will offset losses from the drop in Alps/alerian Energy's long position.| Oklahoma Municipal vs. Western Asset Municipal | Oklahoma Municipal vs. Intermediate Term Bond Fund | Oklahoma Municipal vs. Multisector Bond Sma | Oklahoma Municipal vs. Legg Mason Bw |
| Alps/alerian Energy vs. Virtus Seix Government | Alps/alerian Energy vs. Franklin Adjustable Government | Alps/alerian Energy vs. John Hancock Government | Alps/alerian Energy vs. Inverse Government Long |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |