Correlation Between Oklahoma Municipal and New Perspective
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and New Perspective 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 New Perspective 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 New Perspective Fund, you can compare the effects of market volatilities on Oklahoma Municipal and New Perspective 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 New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and New Perspective.
Diversification Opportunities for Oklahoma Municipal and New Perspective
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Oklahoma and New is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective 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 New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and New Perspective go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and New Perspective
Assuming the 90 days horizon Oklahoma Municipal is expected to generate 2.74 times less return on investment than New Perspective. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 4.67 times less risky than New Perspective. It trades about 0.4 of its potential returns per unit of risk. New Perspective Fund is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 6,491 in New Perspective Fund on September 13, 2024 and sell it today you would earn a total of 185.00 from holding New Perspective Fund or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. New Perspective Fund
Performance |
| Timeline |
| Oklahoma Municipal |
| New Perspective |
Oklahoma Municipal and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and New Perspective
The main advantage of trading using opposite Oklahoma Municipal and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| Oklahoma Municipal vs. Gamco Natural Resources | Oklahoma Municipal vs. Fidelity Advisor Energy | Oklahoma Municipal vs. Jennison Natural Resources | Oklahoma Municipal vs. Franklin Natural Resources |
| New Perspective vs. Schwab Treasury Inflation | New Perspective vs. Fidelity Sai Inflationfocused | New Perspective vs. Ab Bond Inflation | New Perspective vs. Blackrock Inflation Protected |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |