Correlation Between Maryland Tax-free and New Jersey
Can any of the company-specific risk be diversified away by investing in both Maryland Tax-free and New Jersey 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 Maryland Tax-free and New Jersey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maryland Tax Free Bond and New Jersey Tax Free, you can compare the effects of market volatilities on Maryland Tax-free and New Jersey 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 Maryland Tax-free with a short position of New Jersey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maryland Tax-free and New Jersey.
Diversification Opportunities for Maryland Tax-free and New Jersey
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Maryland and New is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Maryland Tax Free Bond and New Jersey Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Jersey Tax and Maryland Tax-free 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 Maryland Tax Free Bond are associated (or correlated) with New Jersey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Jersey Tax has no effect on the direction of Maryland Tax-free i.e., Maryland Tax-free and New Jersey go up and down completely randomly.
Pair Corralation between Maryland Tax-free and New Jersey
Assuming the 90 days horizon Maryland Tax Free Bond is expected to under-perform the New Jersey. In addition to that, Maryland Tax-free is 1.09 times more volatile than New Jersey Tax Free. It trades about -0.04 of its total potential returns per unit of risk. New Jersey Tax Free is currently generating about -0.02 per unit of volatility. If you would invest 1,149 in New Jersey Tax Free on December 2, 2024 and sell it today you would lose (4.00) from holding New Jersey Tax Free or give up 0.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Maryland Tax Free Bond vs. New Jersey Tax Free
Performance |
Timeline |
Maryland Tax Free |
New Jersey Tax |
Maryland Tax-free and New Jersey Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Maryland Tax-free and New Jersey
The main advantage of trading using opposite Maryland Tax-free and New Jersey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maryland Tax-free position performs unexpectedly, New Jersey 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 New Jersey will offset losses from the drop in New Jersey's long position.Maryland Tax-free vs. Maryland Short Term Tax Free | Maryland Tax-free vs. Virginia Tax Free Bond | Maryland Tax-free vs. T Rowe Price | Maryland Tax-free vs. T Rowe Price |
New Jersey vs. New York Tax Free | New Jersey vs. Georgia Tax Free Bond | New Jersey vs. T Rowe Price | New Jersey vs. T Rowe Price |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |