Correlation Between Oklahoma Municipal and Franklin New
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Franklin New 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 New 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 New York, you can compare the effects of market volatilities on Oklahoma Municipal and Franklin New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Franklin New.
Diversification Opportunities for Oklahoma Municipal and Franklin New
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oklahoma and Franklin is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Franklin New go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Franklin New
Assuming the 90 days horizon Oklahoma Municipal Fund is expected to generate 1.47 times more return on investment than Franklin New. However, Oklahoma Municipal is 1.47 times more volatile than Franklin New York. It trades about 0.19 of its potential returns per unit of risk. Franklin New York is currently generating about 0.18 per unit of risk. If you would invest 1,052 in Oklahoma Municipal Fund on September 3, 2024 and sell it today you would earn a total of 14.00 from holding Oklahoma Municipal Fund or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Franklin New York
Performance |
| Timeline |
| Oklahoma Municipal |
| Franklin New York |
Oklahoma Municipal and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Franklin New
The main advantage of trading using opposite Oklahoma Municipal and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Franklin New 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 New will offset losses from the drop in Franklin New'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 |
| Franklin New vs. Americafirst Large Cap | Franklin New vs. Siit Large Cap | Franklin New vs. American Mutual Fund | Franklin New vs. Vela Large Cap |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |