Correlation Between Oklahoma Municipal and Aberdeen Small
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Aberdeen Small 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 Aberdeen Small 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 Aberdeen Small Cap, you can compare the effects of market volatilities on Oklahoma Municipal and Aberdeen Small 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 Aberdeen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Aberdeen Small.
Diversification Opportunities for Oklahoma Municipal and Aberdeen Small
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oklahoma and Aberdeen is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Aberdeen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Small Cap 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 Aberdeen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Small Cap has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Aberdeen Small go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Aberdeen Small
Assuming the 90 days horizon Oklahoma Municipal Fund is expected to generate 0.14 times more return on investment than Aberdeen Small. However, Oklahoma Municipal Fund is 7.18 times less risky than Aberdeen Small. It trades about 0.39 of its potential returns per unit of risk. Aberdeen Small Cap is currently generating about 0.04 per unit of risk. If you would invest 1,055 in Oklahoma Municipal Fund on September 12, 2024 and sell it today you would earn a total of 11.00 from holding Oklahoma Municipal Fund or generate 1.04% 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. Aberdeen Small Cap
Performance |
| Timeline |
| Oklahoma Municipal |
| Aberdeen Small Cap |
Oklahoma Municipal and Aberdeen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Aberdeen Small
The main advantage of trading using opposite Oklahoma Municipal and Aberdeen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Aberdeen Small 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 Aberdeen Small will offset losses from the drop in Aberdeen Small's long position.| Oklahoma Municipal vs. Aig Government Money | Oklahoma Municipal vs. Ridgeworth Seix Government | Oklahoma Municipal vs. Elfun Government Money | Oklahoma Municipal vs. Goldman Sachs Government |
| Aberdeen Small vs. Ab Impact Municipal | Aberdeen Small vs. Baird Strategic Municipal | Aberdeen Small vs. Oklahoma Municipal Fund | Aberdeen Small vs. Blrc Sgy Mnp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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