Correlation Between Oklahoma Municipal and Calvert Unconstrained

Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Calvert Unconstrained 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 Calvert Unconstrained 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 Calvert Unconstrained Bond, you can compare the effects of market volatilities on Oklahoma Municipal and Calvert Unconstrained 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 Calvert Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Calvert Unconstrained.

Diversification Opportunities for Oklahoma Municipal and Calvert Unconstrained

0.86

Correlation Coefficient

Oklahoma Municipal  Calvert Unconstrained

Very poor diversification

The 3 months correlation between Oklahoma and Calvert is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Calvert Unconstrained Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Unconstrained 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 Calvert Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Unconstrained has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Calvert Unconstrained go up and down completely randomly.

Pair Corralation between Oklahoma Municipal and Calvert Unconstrained

Assuming the 90 days horizon Oklahoma Municipal is expected to generate 3.86 times less return on investment than Calvert Unconstrained. In addition to that, Oklahoma Municipal is 1.2 times more volatile than Calvert Unconstrained Bond. It trades about 0.03 of its total potential returns per unit of risk. Calvert Unconstrained Bond is currently generating about 0.13 per unit of volatility. If you would invest  1,271  in Calvert Unconstrained Bond on September 26, 2024 and sell it today you would earn a total of  181.00  from holding Calvert Unconstrained Bond or generate 14.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Oklahoma Municipal Fund  vs.  Calvert Unconstrained Bond

Oklahoma Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oklahoma Municipal Fund has generated negative risk-adjusted returns adding no value to fund investors. 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.

Calvert Unconstrained

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Oklahoma Municipal and Calvert Unconstrained

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

The idea behind Oklahoma Municipal Fund and Calvert Unconstrained Bond 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.