Correlation Between Oklahoma Municipal and Global Technology
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Global Technology 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 Global Technology 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 Global Technology Portfolio, you can compare the effects of market volatilities on Oklahoma Municipal and Global Technology 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 Global Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Global Technology.
Diversification Opportunities for Oklahoma Municipal and Global Technology
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oklahoma and Global is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Global Technology Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Technology 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 Global Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Technology has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Global Technology go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Global Technology
Assuming the 90 days horizon Oklahoma Municipal Fund is expected to under-perform the Global Technology. But the mutual fund apears to be less risky and, when comparing its historical volatility, Oklahoma Municipal Fund is 3.89 times less risky than Global Technology. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Global Technology Portfolio is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,119 in Global Technology Portfolio on September 20, 2024 and sell it today you would earn a total of 60.00 from holding Global Technology Portfolio or generate 2.83% 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. Global Technology Portfolio
Performance |
| Timeline |
| Oklahoma Municipal |
| Global Technology |
Oklahoma Municipal and Global Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Global Technology
The main advantage of trading using opposite Oklahoma Municipal and Global Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Global Technology 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 Global Technology will offset losses from the drop in Global Technology's long position.| Oklahoma Municipal vs. Metropolitan West High | Oklahoma Municipal vs. Nuveen Municipal High | Oklahoma Municipal vs. Pace High Yield | Oklahoma Municipal vs. Us High Relative |
| Global Technology vs. T Rowe Price | Global Technology vs. Oklahoma Municipal Fund | Global Technology vs. Baird Strategic Municipal | Global Technology vs. Ab Impact Municipal |
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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