Correlation Between Western Asset and Oklahoma College
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Oklahoma College into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Municipal and Oklahoma College Savings, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Oklahoma College. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Oklahoma College.
Diversification Opportunities for Western Asset and Oklahoma College
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Oklahoma is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal 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 Western Asset 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 Western Asset Municipal 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 Western Asset i.e., Western Asset and Oklahoma College go up and down completely randomly.
Pair Corralation between Western Asset and Oklahoma College
Assuming the 90 days horizon Western Asset Municipal is expected to under-perform the Oklahoma College. In addition to that, Western Asset is 1.08 times more volatile than Oklahoma College Savings. It trades about -0.03 of its total potential returns per unit of risk. Oklahoma College Savings is currently generating about -0.02 per unit of volatility. If you would invest 1,020 in Oklahoma College Savings on September 4, 2024 and sell it today you would lose (3.00) from holding Oklahoma College Savings or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Oklahoma College Savings
Performance |
| Timeline |
| Western Asset Municipal |
| Oklahoma College Savings |
Western Asset and Oklahoma College Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Oklahoma College
The main advantage of trading using opposite Western Asset and Oklahoma College positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Icon Natural Resources | Western Asset vs. Invesco Energy Fund | Western Asset vs. Dreyfus Natural Resources | Western Asset vs. Gmo Resources |
| Oklahoma College vs. T Rowe Price | Oklahoma College vs. Western Asset Municipal | Oklahoma College vs. Ab Value Fund | Oklahoma College vs. Arrow Managed Futures |
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 CEOs Directory module to screen CEOs from public companies around the world.
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