Correlation Between Oklahoma Municipal and Nuveen All-american
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Nuveen All-american 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 Nuveen All-american 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 Nuveen All American Municipal, you can compare the effects of market volatilities on Oklahoma Municipal and Nuveen All-american 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 Nuveen All-american. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Nuveen All-american.
Diversification Opportunities for Oklahoma Municipal and Nuveen All-american
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oklahoma and Nuveen is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Nuveen All American Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen All American 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 Nuveen All-american. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen All American has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Nuveen All-american go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Nuveen All-american
Assuming the 90 days horizon Oklahoma Municipal Fund is expected to generate 1.06 times more return on investment than Nuveen All-american. However, Oklahoma Municipal is 1.06 times more volatile than Nuveen All American Municipal. It trades about 0.22 of its potential returns per unit of risk. Nuveen All American Municipal is currently generating about 0.21 per unit of risk. If you would invest 1,049 in Oklahoma Municipal Fund on September 1, 2024 and sell it today you would earn a total of 17.00 from holding Oklahoma Municipal Fund or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Nuveen All American Municipal
Performance |
| Timeline |
| Oklahoma Municipal |
| Nuveen All American |
Oklahoma Municipal and Nuveen All-american Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Nuveen All-american
The main advantage of trading using opposite Oklahoma Municipal and Nuveen All-american positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Nuveen All-american 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 Nuveen All-american will offset losses from the drop in Nuveen All-american's long position.| Oklahoma Municipal vs. Mesirow Financial Small | Oklahoma Municipal vs. Transamerica Financial Life | Oklahoma Municipal vs. 1919 Financial Services | Oklahoma Municipal vs. Angel Oak Financial |
| Nuveen All-american vs. Federated Institutional High | Nuveen All-american vs. Ab High Income | Nuveen All-american vs. Pioneer High Yield | Nuveen All-american vs. California High Yield 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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