Correlation Between Oklahoma Municipal and Ab Bond
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Ab Bond 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 Ab Bond 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 Ab Bond Inflation, you can compare the effects of market volatilities on Oklahoma Municipal and Ab Bond 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 Ab Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Ab Bond.
Diversification Opportunities for Oklahoma Municipal and Ab Bond
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oklahoma and ANBIX is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Ab Bond Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Bond Inflation 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 Ab Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Bond Inflation has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Ab Bond go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Ab Bond
Assuming the 90 days horizon Oklahoma Municipal is expected to generate 9.2 times less return on investment than Ab Bond. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 1.15 times less risky than Ab Bond. It trades about 0.01 of its potential returns per unit of risk. Ab Bond Inflation is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 950.00 in Ab Bond Inflation on October 16, 2024 and sell it today you would earn a total of 65.00 from holding Ab Bond Inflation or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Ab Bond Inflation
Performance |
| Timeline |
| Oklahoma Municipal |
| Ab Bond Inflation |
Oklahoma Municipal and Ab Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Ab Bond
The main advantage of trading using opposite Oklahoma Municipal and Ab Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Ab Bond 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 Ab Bond will offset losses from the drop in Ab Bond's long position.| Oklahoma Municipal vs. Nuveen Strategic Municipal | Oklahoma Municipal vs. Pioneer Amt Free Municipal | Oklahoma Municipal vs. Ab Municipal Bond | Oklahoma Municipal vs. Inverse Government Long |
| Ab Bond vs. Oklahoma Municipal Fund | Ab Bond vs. Versatile Bond Portfolio | Ab Bond vs. Dws Government Money | Ab Bond vs. Bbh Intermediate Municipal |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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