Correlation Between Oklahoma Municipal and Polen Smid
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Polen Smid 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 Polen Smid 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 Polen Smid, you can compare the effects of market volatilities on Oklahoma Municipal and Polen Smid 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 Polen Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Polen Smid.
Diversification Opportunities for Oklahoma Municipal and Polen Smid
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oklahoma and Polen is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Polen Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Smid 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 Polen Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Smid has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Polen Smid go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Polen Smid
Assuming the 90 days horizon Oklahoma Municipal is expected to generate 9.96 times less return on investment than Polen Smid. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 5.51 times less risky than Polen Smid. It trades about 0.02 of its potential returns per unit of risk. Polen Smid is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 787.00 in Polen Smid on September 12, 2024 and sell it today you would earn a total of 92.00 from holding Polen Smid or generate 11.69% 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. Polen Smid
Performance |
| Timeline |
| Oklahoma Municipal |
| Polen Smid |
Oklahoma Municipal and Polen Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Polen Smid
The main advantage of trading using opposite Oklahoma Municipal and Polen Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Polen Smid 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 Polen Smid will offset losses from the drop in Polen Smid'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 |
| Polen Smid vs. Oklahoma Municipal Fund | Polen Smid vs. Old Westbury Municipal | Polen Smid vs. Pace Municipal Fixed | Polen Smid 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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