Correlation Between Oklahoma Municipal and Gmo Implementation

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

Diversification Opportunities for Oklahoma Municipal and Gmo Implementation

0.24

Correlation Coefficient

Oklahoma Municipal  Gmo Implementation

Modest diversification

The 3 months correlation between OKLAHOMA and Gmo is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Gmo Implementation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Implementation 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 Gmo Implementation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Implementation has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Gmo Implementation go up and down completely randomly.

Pair Corralation between Oklahoma Municipal and Gmo Implementation

Assuming the 90 days horizon Oklahoma Municipal Fund is expected to under-perform the Gmo Implementation. But the mutual fund apears to be less risky and, when comparing its historical volatility, Oklahoma Municipal Fund is 1.85 times less risky than Gmo Implementation. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Gmo Implementation Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,275  in Gmo Implementation Fund on December 29, 2024 and sell it today you would earn a total of  69.00  from holding Gmo Implementation Fund or generate 5.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Oklahoma Municipal Fund  vs.  Gmo Implementation Fund

Oklahoma Municipal

Risk-Adjusted Performance

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.

Gmo Implementation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gmo Implementation Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Gmo Implementation 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 Gmo Implementation

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

The idea behind Oklahoma Municipal Fund and Gmo Implementation Fund 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.