Correlation Between Oklahoma Municipal and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Dynamic, you can compare the effects of market volatilities on Oklahoma Municipal and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Goldman Sachs.
Diversification Opportunities for Oklahoma Municipal and Goldman Sachs
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oklahoma and Goldman is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Goldman Sachs Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Dynamic 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Dynamic has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Goldman Sachs go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Goldman Sachs
Assuming the 90 days horizon Oklahoma Municipal is expected to generate 3.55 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 3.31 times less risky than Goldman Sachs. It trades about 0.12 of its potential returns per unit of risk. Goldman Sachs Dynamic is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,860 in Goldman Sachs Dynamic on September 1, 2024 and sell it today you would earn a total of 259.00 from holding Goldman Sachs Dynamic or generate 13.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Goldman Sachs Dynamic
Performance |
| Timeline |
| Oklahoma Municipal |
| Goldman Sachs Dynamic |
Oklahoma Municipal and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Goldman Sachs
The main advantage of trading using opposite Oklahoma Municipal and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' 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 |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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