Correlation Between American Funds and Oklahoma College
Can any of the company-specific risk be diversified away by investing in both American Funds and Oklahoma College 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 American Funds and Oklahoma College into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Retirement and Oklahoma College Savings, you can compare the effects of market volatilities on American Funds and Oklahoma College 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 American Funds with a short position of Oklahoma College. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Oklahoma College.
Diversification Opportunities for American Funds and Oklahoma College
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Oklahoma is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Retirement and Oklahoma College Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma College Savings and American Funds 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 American Funds Retirement are associated (or correlated) with Oklahoma College. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oklahoma College Savings has no effect on the direction of American Funds i.e., American Funds and Oklahoma College go up and down completely randomly.
Pair Corralation between American Funds and Oklahoma College
Assuming the 90 days horizon American Funds is expected to generate 1.15 times less return on investment than Oklahoma College. But when comparing it to its historical volatility, American Funds Retirement is 1.82 times less risky than Oklahoma College. It trades about 0.05 of its potential returns per unit of risk. Oklahoma College Savings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,216 in Oklahoma College Savings on November 8, 2024 and sell it today you would earn a total of 15.00 from holding Oklahoma College Savings or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Retirement vs. Oklahoma College Savings
Performance |
| Timeline |
| American Funds Retirement |
| Oklahoma College Savings |
American Funds and Oklahoma College Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Oklahoma College
The main advantage of trading using opposite American Funds and Oklahoma College positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Oklahoma College 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 College will offset losses from the drop in Oklahoma College's long position.| American Funds vs. Ashmore Emerging Markets | American Funds vs. Franklin Emerging Market | American Funds vs. Investec Emerging Markets | American Funds vs. Jpmorgan Emerging Markets |
| Oklahoma College vs. The Hartford High | Oklahoma College vs. Transamerica High Yield | Oklahoma College vs. Calamos High Income | Oklahoma College vs. The Hartford Floating |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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