Correlation Between Oklahoma Municipal and Continental Small
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Continental Small 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 Continental Small 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 Continental Small Pany, you can compare the effects of market volatilities on Oklahoma Municipal and Continental Small 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 Continental Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Continental Small.
Diversification Opportunities for Oklahoma Municipal and Continental Small
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oklahoma and Continental is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Continental Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Small Pany 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 Continental Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Small Pany has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Continental Small go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Continental Small
Assuming the 90 days horizon Oklahoma Municipal is expected to generate 3.81 times less return on investment than Continental Small. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 3.91 times less risky than Continental Small. It trades about 0.05 of its potential returns per unit of risk. Continental Small Pany is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,500 in Continental Small Pany on September 12, 2024 and sell it today you would earn a total of 544.00 from holding Continental Small Pany or generate 21.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Continental Small Pany
Performance |
| Timeline |
| Oklahoma Municipal |
| Continental Small Pany |
Oklahoma Municipal and Continental Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Continental Small
The main advantage of trading using opposite Oklahoma Municipal and Continental Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Continental Small 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 Continental Small will offset losses from the drop in Continental Small's long position.| Oklahoma Municipal vs. Aig Government Money | Oklahoma Municipal vs. Ridgeworth Seix Government | Oklahoma Municipal vs. Elfun Government Money | Oklahoma Municipal vs. Goldman Sachs Government |
| Continental Small vs. Oklahoma Municipal Fund | Continental Small vs. Franklin High Yield | Continental Small vs. T Rowe Price | Continental Small vs. Pace Municipal Fixed |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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