Correlation Between Oklahoma Municipal and Salient Select
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Salient Select 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 Salient Select 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 Salient Select Income, you can compare the effects of market volatilities on Oklahoma Municipal and Salient Select 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 Salient Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Salient Select.
Diversification Opportunities for Oklahoma Municipal and Salient Select
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oklahoma and Salient is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Salient Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Select Income 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 Salient Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Select Income has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Salient Select go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Salient Select
Assuming the 90 days horizon Oklahoma Municipal Fund is expected to generate 0.42 times more return on investment than Salient Select. However, Oklahoma Municipal Fund is 2.38 times less risky than Salient Select. It trades about 0.4 of its potential returns per unit of risk. Salient Select Income is currently generating about 0.01 per unit of risk. If you would invest 1,055 in Oklahoma Municipal Fund on September 13, 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. Salient Select Income
Performance |
| Timeline |
| Oklahoma Municipal |
| Salient Select Income |
Oklahoma Municipal and Salient Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Salient Select
The main advantage of trading using opposite Oklahoma Municipal and Salient Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Salient Select 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 Salient Select will offset losses from the drop in Salient Select's long position.| Oklahoma Municipal vs. Gamco Natural Resources | Oklahoma Municipal vs. Fidelity Advisor Energy | Oklahoma Municipal vs. Jennison Natural Resources | Oklahoma Municipal vs. Franklin Natural Resources |
| Salient Select vs. Salient Tactical Plus | Salient Select vs. Salient Tactical Plus | Salient Select vs. Salient Tactical Plus | Salient Select vs. Salient Tactical Plus |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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