Correlation Between Oklahoma Municipal and Blrc Sgy
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Blrc Sgy 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 Blrc Sgy 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 Blrc Sgy Mnp, you can compare the effects of market volatilities on Oklahoma Municipal and Blrc Sgy 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 Blrc Sgy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Blrc Sgy.
Diversification Opportunities for Oklahoma Municipal and Blrc Sgy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oklahoma and Blrc is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Blrc Sgy Mnp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blrc Sgy Mnp 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 Blrc Sgy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blrc Sgy Mnp has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Blrc Sgy go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Blrc Sgy
Assuming the 90 days horizon Oklahoma Municipal is expected to generate 1.05 times less return on investment than Blrc Sgy. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 1.02 times less risky than Blrc Sgy. It trades about 0.25 of its potential returns per unit of risk. Blrc Sgy Mnp is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,046 in Blrc Sgy Mnp on August 30, 2024 and sell it today you would earn a total of 20.00 from holding Blrc Sgy Mnp or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Blrc Sgy Mnp
Performance |
| Timeline |
| Oklahoma Municipal |
| Blrc Sgy Mnp |
Oklahoma Municipal and Blrc Sgy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Blrc Sgy
The main advantage of trading using opposite Oklahoma Municipal and Blrc Sgy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Blrc Sgy 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 Blrc Sgy will offset losses from the drop in Blrc Sgy's long position.| Oklahoma Municipal vs. Western Asset Municipal | Oklahoma Municipal vs. Intermediate Term Bond Fund | Oklahoma Municipal vs. Multisector Bond Sma | Oklahoma Municipal vs. Legg Mason Bw |
| Blrc Sgy vs. Growth Fund Of | Blrc Sgy vs. T Rowe Price | Blrc Sgy vs. Nova Fund Class | Blrc Sgy vs. Balanced Fund Investor |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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