Correlation Between Kansas Municipal and Integrity Growth

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

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

Diversification Opportunities for Kansas Municipal and Integrity Growth

0.36

Correlation Coefficient

Kansas Municipal  Integrity Growth

Weak diversification

The 3 months correlation between Kansas and Integrity is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kansas Municipal Fund and Integrity Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrity Growth Income and Kansas Municipal 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 Kansas Municipal Fund are associated (or correlated) with Integrity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrity Growth Income has no effect on the direction of Kansas Municipal i.e., Kansas Municipal and Integrity Growth go up and down completely randomly.

Pair Corralation between Kansas Municipal and Integrity Growth

Assuming the 90 days horizon Kansas Municipal Fund is expected to generate 0.25 times more return on investment than Integrity Growth. However, Kansas Municipal Fund is 4.06 times less risky than Integrity Growth. It trades about -0.07 of its potential returns per unit of risk. Integrity Growth Income is currently generating about -0.04 per unit of risk. If you would invest  948.00  in Kansas Municipal Fund on December 30, 2024 and sell it today you would lose (11.00) from holding Kansas Municipal Fund or give up 1.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kansas Municipal Fund  vs.  Integrity Growth Income

Kansas Municipal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kansas Municipal Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Kansas Municipal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Integrity Growth Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integrity Growth Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Integrity Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kansas Municipal and Integrity Growth

The main advantage of trading using opposite Kansas Municipal and Integrity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kansas Municipal position performs unexpectedly, Integrity Growth 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 Integrity Growth will offset losses from the drop in Integrity Growth's long position.

The idea behind Kansas Municipal Fund and Integrity Growth Income 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.