Correlation Between Oklahoma Municipal and Banking Fund
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Banking Fund 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 Banking Fund 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 Banking Fund Class, you can compare the effects of market volatilities on Oklahoma Municipal and Banking Fund 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 Banking Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Banking Fund.
Diversification Opportunities for Oklahoma Municipal and Banking Fund
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oklahoma and Banking is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Banking Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banking Fund Class 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 Banking Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banking Fund Class has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Banking Fund go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Banking Fund
Assuming the 90 days horizon Oklahoma Municipal is expected to generate 23.14 times less return on investment than Banking Fund. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 4.61 times less risky than Banking Fund. It trades about 0.06 of its potential returns per unit of risk. Banking Fund Class is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 8,900 in Banking Fund Class on November 1, 2024 and sell it today you would earn a total of 610.00 from holding Banking Fund Class or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Banking Fund Class
Performance |
| Timeline |
| Oklahoma Municipal |
| Banking Fund Class |
Oklahoma Municipal and Banking Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Banking Fund
The main advantage of trading using opposite Oklahoma Municipal and Banking Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Banking Fund 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 Banking Fund will offset losses from the drop in Banking Fund's long position.| Oklahoma Municipal vs. Aqr Diversified Arbitrage | Oklahoma Municipal vs. Fulcrum Diversified Absolute | Oklahoma Municipal vs. T Rowe Price | Oklahoma Municipal vs. Vy T Rowe |
| Banking Fund vs. Oklahoma Municipal Fund | Banking Fund vs. Inverse Government Long | Banking Fund vs. Morningstar Municipal Bond | Banking Fund vs. Pace Municipal Fixed |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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