Correlation Between 475 RABOBANK17GMTN and 175 MUNI

Can any of the company-specific risk be diversified away by investing in both 475 RABOBANK17GMTN and 175 MUNI 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 475 RABOBANK17GMTN and 175 MUNI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 475 RABOBANK17GMTN and 175 MUNI FIN, you can compare the effects of market volatilities on 475 RABOBANK17GMTN and 175 MUNI 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 475 RABOBANK17GMTN with a short position of 175 MUNI. Check out your portfolio center. Please also check ongoing floating volatility patterns of 475 RABOBANK17GMTN and 175 MUNI.

Diversification Opportunities for 475 RABOBANK17GMTN and 175 MUNI

0.0

Correlation Coefficient

475 RABOBANK17GMTN  175 MUNI

Pay attention - limited upside

The 3 months correlation between 475 and 175 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 475 RABOBANK17GMTN and 175 MUNI FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 175 MUNI FIN and 475 RABOBANK17GMTN 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 475 RABOBANK17GMTN are associated (or correlated) with 175 MUNI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 175 MUNI FIN has no effect on the direction of 475 RABOBANK17GMTN i.e., 475 RABOBANK17GMTN and 175 MUNI go up and down completely randomly.

Pair Corralation between 475 RABOBANK17GMTN and 175 MUNI

If you would invest (100.00) in 175 MUNI FIN on October 12, 2024 and sell it today you would earn a total of  100.00  from holding 175 MUNI FIN or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

475 RABOBANK17GMTN  vs.  175 MUNI FIN

475 RABOBANK17GMTN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 475 RABOBANK17GMTN has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong fundamental indicators, 475 RABOBANK17GMTN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

175 MUNI FIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 175 MUNI FIN has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, 175 MUNI is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 475 RABOBANK17GMTN and 175 MUNI

The main advantage of trading using opposite 475 RABOBANK17GMTN and 175 MUNI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 475 RABOBANK17GMTN position performs unexpectedly, 175 MUNI 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 175 MUNI will offset losses from the drop in 175 MUNI's long position.

The idea behind 475 RABOBANK17GMTN and 175 MUNI FIN 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.