Correlation Between Oklahoma Municipal and Intermediate-term
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Intermediate-term 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 Intermediate-term 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 Intermediate Term Tax Free Bond, you can compare the effects of market volatilities on Oklahoma Municipal and Intermediate-term 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 Intermediate-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Intermediate-term.
Diversification Opportunities for Oklahoma Municipal and Intermediate-term
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oklahoma and Intermediate-term is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Intermediate Term Tax Free Bon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Term Tax 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 Intermediate-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Term Tax has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Intermediate-term go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Intermediate-term
Assuming the 90 days horizon Oklahoma Municipal Fund is expected to generate 1.39 times more return on investment than Intermediate-term. However, Oklahoma Municipal is 1.39 times more volatile than Intermediate Term Tax Free Bond. It trades about 0.17 of its potential returns per unit of risk. Intermediate Term Tax Free Bond is currently generating about 0.15 per unit of risk. If you would invest 1,049 in Oklahoma Municipal Fund on August 29, 2024 and sell it today you would earn a total of 14.00 from holding Oklahoma Municipal Fund or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Intermediate Term Tax Free Bon
Performance |
| Timeline |
| Oklahoma Municipal |
| Intermediate Term Tax |
Oklahoma Municipal and Intermediate-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Intermediate-term
The main advantage of trading using opposite Oklahoma Municipal and Intermediate-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Intermediate-term 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 Intermediate-term will offset losses from the drop in Intermediate-term'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 |
| Intermediate-term vs. HUMANA INC | Intermediate-term vs. Aquagold International | Intermediate-term vs. Barloworld Ltd ADR | Intermediate-term vs. Morningstar Unconstrained Allocation |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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