Correlation Between Short Oil and Hartford Municipal
Can any of the company-specific risk be diversified away by investing in both Short Oil and Hartford Municipal 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 Short Oil and Hartford Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Oil Gas and Hartford Municipal Short, you can compare the effects of market volatilities on Short Oil and Hartford Municipal 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 Short Oil with a short position of Hartford Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Oil and Hartford Municipal.
Diversification Opportunities for Short Oil and Hartford Municipal
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Short and Hartford is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Short Oil Gas and Hartford Municipal Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Municipal Short and Short Oil 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 Short Oil Gas are associated (or correlated) with Hartford Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Municipal Short has no effect on the direction of Short Oil i.e., Short Oil and Hartford Municipal go up and down completely randomly.
Pair Corralation between Short Oil and Hartford Municipal
Assuming the 90 days horizon Short Oil Gas is expected to generate 11.28 times more return on investment than Hartford Municipal. However, Short Oil is 11.28 times more volatile than Hartford Municipal Short. It trades about -0.01 of its potential returns per unit of risk. Hartford Municipal Short is currently generating about -0.26 per unit of risk. If you would invest 1,422 in Short Oil Gas on October 8, 2024 and sell it today you would lose (6.00) from holding Short Oil Gas or give up 0.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Short Oil Gas vs. Hartford Municipal Short
Performance |
Timeline |
Short Oil Gas |
Hartford Municipal Short |
Short Oil and Hartford Municipal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Short Oil and Hartford Municipal
The main advantage of trading using opposite Short Oil and Hartford Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Oil position performs unexpectedly, Hartford Municipal 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 Hartford Municipal will offset losses from the drop in Hartford Municipal's long position.Short Oil vs. Ab Government Exchange | Short Oil vs. Ab Government Exchange | Short Oil vs. Edward Jones Money | Short Oil vs. Voya Government Money |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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