Correlation Between Oklahoma Municipal and Hartford Moderate
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Hartford Moderate 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 Hartford Moderate 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 Hartford Moderate Allocation, you can compare the effects of market volatilities on Oklahoma Municipal and Hartford Moderate 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 Hartford Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Hartford Moderate.
Diversification Opportunities for Oklahoma Municipal and Hartford Moderate
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oklahoma and Hartford is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Hartford Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Moderate 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 Hartford Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Moderate has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Hartford Moderate go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Hartford Moderate
Assuming the 90 days horizon Oklahoma Municipal is expected to generate 1.93 times less return on investment than Hartford Moderate. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 1.16 times less risky than Hartford Moderate. It trades about 0.22 of its potential returns per unit of risk. Hartford Moderate Allocation is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,297 in Hartford Moderate Allocation on September 1, 2024 and sell it today you would earn a total of 43.00 from holding Hartford Moderate Allocation or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Hartford Moderate Allocation
Performance |
| Timeline |
| Oklahoma Municipal |
| Hartford Moderate |
Oklahoma Municipal and Hartford Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Hartford Moderate
The main advantage of trading using opposite Oklahoma Municipal and Hartford Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Hartford Moderate 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 Hartford Moderate will offset losses from the drop in Hartford Moderate's 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 |
| Hartford Moderate vs. Oklahoma Municipal Fund | Hartford Moderate vs. Ab Impact Municipal | Hartford Moderate vs. Ab Global Bond | Hartford Moderate vs. Calamos Short Term Bond |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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