Correlation Between Oklahoma Municipal and Franklin Founding
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Franklin Founding 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 Franklin Founding 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 Franklin Founding Funds, you can compare the effects of market volatilities on Oklahoma Municipal and Franklin Founding 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 Franklin Founding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Franklin Founding.
Diversification Opportunities for Oklahoma Municipal and Franklin Founding
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oklahoma and Franklin is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Franklin Founding Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Founding Funds 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 Franklin Founding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Founding Funds has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Franklin Founding go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Franklin Founding
Assuming the 90 days horizon Oklahoma Municipal is expected to generate 2.27 times less return on investment than Franklin Founding. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 2.31 times less risky than Franklin Founding. It trades about 0.1 of its potential returns per unit of risk. Franklin Founding Funds is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,505 in Franklin Founding Funds on September 3, 2024 and sell it today you would earn a total of 99.00 from holding Franklin Founding Funds or generate 6.58% 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. Franklin Founding Funds
Performance |
| Timeline |
| Oklahoma Municipal |
| Franklin Founding Funds |
Oklahoma Municipal and Franklin Founding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Franklin Founding
The main advantage of trading using opposite Oklahoma Municipal and Franklin Founding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Franklin Founding 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 Franklin Founding will offset losses from the drop in Franklin Founding's long position.| Oklahoma Municipal vs. Limited Term Tax | Oklahoma Municipal vs. Calvert Short Duration | Oklahoma Municipal vs. Federated Short Term Income | Oklahoma Municipal vs. Jhancock Short Duration |
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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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