Correlation Between Oklahoma Municipal and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Federated Hermes 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 Federated Hermes 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 Federated Hermes Inflation, you can compare the effects of market volatilities on Oklahoma Municipal and Federated Hermes 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 Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Federated Hermes.
Diversification Opportunities for Oklahoma Municipal and Federated Hermes
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oklahoma and Federated is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Federated Hermes Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Inf 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 Federated Hermes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Hermes Inf has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Federated Hermes go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Federated Hermes
Assuming the 90 days horizon Oklahoma Municipal Fund is expected to generate 1.28 times more return on investment than Federated Hermes. However, Oklahoma Municipal is 1.28 times more volatile than Federated Hermes Inflation. It trades about 0.25 of its potential returns per unit of risk. Federated Hermes Inflation is currently generating about 0.04 per unit of risk. If you would invest 1,046 in Oklahoma Municipal Fund on August 30, 2024 and sell it today you would earn a total of 20.00 from holding Oklahoma Municipal Fund or generate 1.91% 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. Federated Hermes Inflation
Performance |
| Timeline |
| Oklahoma Municipal |
| Federated Hermes Inf |
Oklahoma Municipal and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Federated Hermes
The main advantage of trading using opposite Oklahoma Municipal and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Federated Hermes 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 Federated Hermes will offset losses from the drop in Federated Hermes' long position.| Oklahoma Municipal vs. Virginia Bond Fund | Oklahoma Municipal vs. HUMANA INC | Oklahoma Municipal vs. Aquagold International | Oklahoma Municipal vs. Barloworld Ltd ADR |
| Federated Hermes vs. Touchstone Ohio Tax | Federated Hermes vs. Angel Oak Financial | Federated Hermes vs. John Hancock Money | Federated Hermes vs. Mirova Global Green |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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