Correlation Between Aquila Tax-free and Oklahoma Municipal
Can any of the company-specific risk be diversified away by investing in both Aquila Tax-free and Oklahoma Municipal 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 Aquila Tax-free and Oklahoma Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquila Tax Free Trust and Oklahoma Municipal Fund, you can compare the effects of market volatilities on Aquila Tax-free and Oklahoma Municipal 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 Aquila Tax-free with a short position of Oklahoma Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquila Tax-free and Oklahoma Municipal.
Diversification Opportunities for Aquila Tax-free and Oklahoma Municipal
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aquila and Oklahoma is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Aquila Tax Free Trust and Oklahoma Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma Municipal and Aquila Tax-free 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 Aquila Tax Free Trust are associated (or correlated) with Oklahoma Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oklahoma Municipal has no effect on the direction of Aquila Tax-free i.e., Aquila Tax-free and Oklahoma Municipal go up and down completely randomly.
Pair Corralation between Aquila Tax-free and Oklahoma Municipal
Assuming the 90 days horizon Aquila Tax-free is expected to generate 1.81 times less return on investment than Oklahoma Municipal. But when comparing it to its historical volatility, Aquila Tax Free Trust is 1.47 times less risky than Oklahoma Municipal. It trades about 0.13 of its potential returns per unit of risk. Oklahoma Municipal Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,045 in Oklahoma Municipal Fund on August 25, 2024 and sell it today you would earn a total of 13.00 from holding Oklahoma Municipal Fund or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquila Tax Free Trust vs. Oklahoma Municipal Fund
Performance |
| Timeline |
| Aquila Tax Free |
| Oklahoma Municipal |
Aquila Tax-free and Oklahoma Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquila Tax-free and Oklahoma Municipal
The main advantage of trading using opposite Aquila Tax-free and Oklahoma Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquila Tax-free position performs unexpectedly, Oklahoma Municipal 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 Oklahoma Municipal will offset losses from the drop in Oklahoma Municipal's long position.| Aquila Tax-free vs. T Rowe Price | Aquila Tax-free vs. Falcon Focus Scv | Aquila Tax-free vs. Arrow Managed Futures | Aquila Tax-free vs. Rbb Fund |
| Oklahoma Municipal vs. Growth Fund Of | Oklahoma Municipal vs. Champlain Mid Cap | Oklahoma Municipal vs. Victory Rs Growth | Oklahoma Municipal vs. Eip Growth And |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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