Correlation Between Oklahoma Municipal and Swan Defined
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Swan Defined 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 Swan Defined 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 Swan Defined Risk, you can compare the effects of market volatilities on Oklahoma Municipal and Swan Defined 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 Swan Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Swan Defined.
Diversification Opportunities for Oklahoma Municipal and Swan Defined
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oklahoma and Swan is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Swan Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Defined Risk 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 Swan Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Defined Risk has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Swan Defined go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Swan Defined
Assuming the 90 days horizon Oklahoma Municipal is expected to generate 4.76 times less return on investment than Swan Defined. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 4.01 times less risky than Swan Defined. It trades about 0.04 of its potential returns per unit of risk. Swan Defined Risk is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,343 in Swan Defined Risk on September 12, 2024 and sell it today you would earn a total of 241.00 from holding Swan Defined Risk or generate 17.94% 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. Swan Defined Risk
Performance |
| Timeline |
| Oklahoma Municipal |
| Swan Defined Risk |
Oklahoma Municipal and Swan Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Swan Defined
The main advantage of trading using opposite Oklahoma Municipal and Swan Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Swan Defined 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 Swan Defined will offset losses from the drop in Swan Defined'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 |
| Swan Defined vs. California High Yield Municipal | Swan Defined vs. Oklahoma Municipal Fund | Swan Defined vs. Franklin High Yield | Swan Defined vs. Ishares Municipal Bond |
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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