Correlation Between Oklahoma Municipal and Calvert Responsible

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

Diversification Opportunities for Oklahoma Municipal and Calvert Responsible

0.15

Correlation Coefficient

Oklahoma Municipal  Calvert Responsible

Average diversification

The 3 months correlation between Oklahoma and Calvert is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Calvert Responsible Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Responsible Index 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 Responsible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Responsible Index has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Calvert Responsible go up and down completely randomly.

Pair Corralation between Oklahoma Municipal and Calvert Responsible

Assuming the 90 days horizon Oklahoma Municipal is expected to generate 10.29 times less return on investment than Calvert Responsible. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 1.94 times less risky than Calvert Responsible. It trades about 0.02 of its potential returns per unit of risk. Calvert Responsible Index is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,727  in Calvert Responsible Index on September 12, 2024 and sell it today you would earn a total of  111.00  from holding Calvert Responsible Index or generate 4.07% return on investment over 90 days.

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

Oklahoma Municipal Fund  vs.  Calvert Responsible Index

Oklahoma Municipal

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oklahoma Municipal Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. 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 Responsible Index

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Responsible Index are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert Responsible 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 Responsible

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

The idea behind Oklahoma Municipal Fund and Calvert Responsible Index 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.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.