Correlation Between Carillon Chartwell and Oklahoma Municipal

Can any of the company-specific risk be diversified away by investing in both Carillon Chartwell 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 Carillon Chartwell and Oklahoma Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carillon Chartwell Short and Oklahoma Municipal Fund, you can compare the effects of market volatilities on Carillon Chartwell 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 Carillon Chartwell with a short position of Oklahoma Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carillon Chartwell and Oklahoma Municipal.

Diversification Opportunities for Carillon Chartwell and Oklahoma Municipal

0.2

Correlation Coefficient

Carillon Chartwell  Oklahoma Municipal

Modest diversification

The 3 months correlation between Carillon and Oklahoma is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Carillon Chartwell Short and Oklahoma Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma Municipal and Carillon Chartwell 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 Carillon Chartwell Short 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 Carillon Chartwell i.e., Carillon Chartwell and Oklahoma Municipal go up and down completely randomly.

Pair Corralation between Carillon Chartwell and Oklahoma Municipal

Assuming the 90 days horizon Carillon Chartwell is expected to generate 1.06 times less return on investment than Oklahoma Municipal. But when comparing it to its historical volatility, Carillon Chartwell Short is 2.82 times less risky than Oklahoma Municipal. It trades about 0.1 of its potential returns per unit of risk. Oklahoma Municipal Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,060  in Oklahoma Municipal Fund on September 4, 2024 and sell it today you would earn a total of  7.00  from holding Oklahoma Municipal Fund or generate 0.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Carillon Chartwell Short  vs.  Oklahoma Municipal Fund

Carillon Chartwell Short

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carillon Chartwell Short are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Carillon Chartwell is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oklahoma Municipal

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oklahoma Municipal Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Oklahoma Municipal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Carillon Chartwell and Oklahoma Municipal

The main advantage of trading using opposite Carillon Chartwell and Oklahoma Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carillon Chartwell 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.

The idea behind Carillon Chartwell Short and Oklahoma 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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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.