Correlation Between Oklahoma Municipal and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Angel Oak 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 Oklahoma Municipal and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oklahoma Municipal Fund and Angel Oak Multi Strategy, you can compare the effects of market volatilities on Oklahoma Municipal and Angel Oak 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 Oklahoma Municipal with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Angel Oak.
Diversification Opportunities for Oklahoma Municipal and Angel Oak
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oklahoma and Angel is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Angel Oak Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Multi and Oklahoma 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 Oklahoma Municipal Fund are associated (or correlated) with Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Multi has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Angel Oak go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Angel Oak
Assuming the 90 days horizon Oklahoma Municipal Fund is expected to under-perform the Angel Oak. In addition to that, Oklahoma Municipal is 3.24 times more volatile than Angel Oak Multi Strategy. It trades about -0.32 of its total potential returns per unit of risk. Angel Oak Multi Strategy is currently generating about -0.55 per unit of volatility. If you would invest 859.00 in Angel Oak Multi Strategy on October 8, 2024 and sell it today you would lose (8.00) from holding Angel Oak Multi Strategy or give up 0.93% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Oklahoma Municipal Fund vs. Angel Oak Multi Strategy
Performance |
Timeline |
Oklahoma Municipal |
Angel Oak Multi |
Oklahoma Municipal and Angel Oak Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oklahoma Municipal and Angel Oak
The main advantage of trading using opposite Oklahoma Municipal and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Angel Oak 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 Angel Oak will offset losses from the drop in Angel Oak's long position.Oklahoma Municipal vs. Ft 7934 Corporate | Oklahoma Municipal vs. Multisector Bond Sma | Oklahoma Municipal vs. Georgia Tax Free Bond | Oklahoma Municipal vs. T Rowe Price |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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