Correlation Between Jennison Natural and Oklahoma Municipal
Can any of the company-specific risk be diversified away by investing in both Jennison Natural 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 Jennison Natural and Oklahoma Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jennison Natural Resources and Oklahoma Municipal Fund, you can compare the effects of market volatilities on Jennison Natural 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 Jennison Natural with a short position of Oklahoma Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jennison Natural and Oklahoma Municipal.
Diversification Opportunities for Jennison Natural and Oklahoma Municipal
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jennison and Oklahoma is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Jennison Natural Resources and Oklahoma Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma Municipal and Jennison Natural 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 Jennison Natural Resources 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 Jennison Natural i.e., Jennison Natural and Oklahoma Municipal go up and down completely randomly.
Pair Corralation between Jennison Natural and Oklahoma Municipal
Assuming the 90 days horizon Jennison Natural Resources is expected to under-perform the Oklahoma Municipal. In addition to that, Jennison Natural is 5.22 times more volatile than Oklahoma Municipal Fund. It trades about -0.01 of its total potential returns per unit of risk. Oklahoma Municipal Fund is currently generating about 0.02 per unit of volatility. If you would invest 1,046 in Oklahoma Municipal Fund on December 4, 2024 and sell it today you would earn a total of 10.00 from holding Oklahoma Municipal Fund or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jennison Natural Resources vs. Oklahoma Municipal Fund
Performance |
| Timeline |
| Jennison Natural Res |
| Oklahoma Municipal |
Jennison Natural and Oklahoma Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jennison Natural and Oklahoma Municipal
The main advantage of trading using opposite Jennison Natural and Oklahoma Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jennison Natural 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.| Jennison Natural vs. The Hartford Servative | Jennison Natural vs. Hartford Moderate Allocation | Jennison Natural vs. Franklin Moderate Allocation | Jennison Natural vs. Touchstone Large Cap |
| Oklahoma Municipal vs. Franklin Natural Resources | Oklahoma Municipal vs. World Energy Fund | Oklahoma Municipal vs. Transamerica Mlp Energy | Oklahoma Municipal vs. Alpsalerian Energy Infrastructure |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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