Correlation Between Counterpoint Tactical and Nebraska Municipal
Can any of the company-specific risk be diversified away by investing in both Counterpoint Tactical and Nebraska 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 Counterpoint Tactical and Nebraska Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Counterpoint Tactical Municipal and Nebraska Municipal Fund, you can compare the effects of market volatilities on Counterpoint Tactical and Nebraska 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 Counterpoint Tactical with a short position of Nebraska Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Counterpoint Tactical and Nebraska Municipal.
Diversification Opportunities for Counterpoint Tactical and Nebraska Municipal
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Counterpoint and Nebraska is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Counterpoint Tactical Municipa and Nebraska Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebraska Municipal and Counterpoint Tactical 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 Counterpoint Tactical Municipal are associated (or correlated) with Nebraska Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebraska Municipal has no effect on the direction of Counterpoint Tactical i.e., Counterpoint Tactical and Nebraska Municipal go up and down completely randomly.
Pair Corralation between Counterpoint Tactical and Nebraska Municipal
Assuming the 90 days horizon Counterpoint Tactical Municipal is expected to generate 0.98 times more return on investment than Nebraska Municipal. However, Counterpoint Tactical Municipal is 1.02 times less risky than Nebraska Municipal. It trades about 0.06 of its potential returns per unit of risk. Nebraska Municipal Fund is currently generating about 0.01 per unit of risk. If you would invest 1,003 in Counterpoint Tactical Municipal on November 27, 2024 and sell it today you would earn a total of 71.00 from holding Counterpoint Tactical Municipal or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Counterpoint Tactical Municipa vs. Nebraska Municipal Fund
Performance |
| Timeline |
| Counterpoint Tactical |
| Nebraska Municipal |
Counterpoint Tactical and Nebraska Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Counterpoint Tactical and Nebraska Municipal
The main advantage of trading using opposite Counterpoint Tactical and Nebraska Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Counterpoint Tactical position performs unexpectedly, Nebraska 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 Nebraska Municipal will offset losses from the drop in Nebraska Municipal's long position.The idea behind Counterpoint Tactical Municipal and Nebraska Municipal Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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