Correlation Between Oklahoma Municipal and Payden Strategic
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Payden Strategic 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 Payden Strategic 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 Payden Strategic Income, you can compare the effects of market volatilities on Oklahoma Municipal and Payden Strategic 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 Payden Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Payden Strategic.
Diversification Opportunities for Oklahoma Municipal and Payden Strategic
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oklahoma and Payden is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Payden Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Strategic 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 Payden Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Strategic Income has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Payden Strategic go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Payden Strategic
Assuming the 90 days horizon Oklahoma Municipal Fund is expected to generate 1.86 times more return on investment than Payden Strategic. However, Oklahoma Municipal is 1.86 times more volatile than Payden Strategic Income. It trades about -0.04 of its potential returns per unit of risk. Payden Strategic Income is currently generating about -0.08 per unit of risk. If you would invest 1,069 in Oklahoma Municipal Fund on August 29, 2024 and sell it today you would lose (6.00) from holding Oklahoma Municipal Fund or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Payden Strategic Income
Performance |
| Timeline |
| Oklahoma Municipal |
| Payden Strategic Income |
Oklahoma Municipal and Payden Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Payden Strategic
The main advantage of trading using opposite Oklahoma Municipal and Payden Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Payden Strategic 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 Payden Strategic will offset losses from the drop in Payden Strategic's long position.| Oklahoma Municipal vs. Colorado Bondshares A | Oklahoma Municipal vs. Virginia Bond Fund | Oklahoma Municipal vs. HUMANA INC | Oklahoma Municipal vs. Aquagold International |
| Payden Strategic vs. Oklahoma Municipal Fund | Payden Strategic vs. Nuveen Minnesota Municipal | Payden Strategic vs. Counterpoint Tactical Municipal | Payden Strategic vs. California High Yield 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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