Correlation Between American Independence and Aquila Tax-free
Can any of the company-specific risk be diversified away by investing in both American Independence and Aquila Tax-free 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 American Independence and Aquila Tax-free into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Independence Kansas and Aquila Tax Free Trust, you can compare the effects of market volatilities on American Independence and Aquila Tax-free 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 American Independence with a short position of Aquila Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Independence and Aquila Tax-free.
Diversification Opportunities for American Independence and Aquila Tax-free
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between American and Aquila is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding American Independence Kansas and Aquila Tax Free Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Tax Free and American Independence 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 American Independence Kansas are associated (or correlated) with Aquila Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Tax Free has no effect on the direction of American Independence i.e., American Independence and Aquila Tax-free go up and down completely randomly.
Pair Corralation between American Independence and Aquila Tax-free
Assuming the 90 days horizon American Independence Kansas is expected to under-perform the Aquila Tax-free. In addition to that, American Independence is 1.23 times more volatile than Aquila Tax Free Trust. It trades about -0.06 of its total potential returns per unit of risk. Aquila Tax Free Trust is currently generating about -0.05 per unit of volatility. If you would invest 1,030 in Aquila Tax Free Trust on January 24, 2024 and sell it today you would lose (4.00) from holding Aquila Tax Free Trust or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Independence Kansas vs. Aquila Tax Free Trust
Performance |
| Timeline |
| American Independence |
| Aquila Tax Free |
American Independence and Aquila Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Independence and Aquila Tax-free
The main advantage of trading using opposite American Independence and Aquila Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Independence position performs unexpectedly, Aquila Tax-free 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 Aquila Tax-free will offset losses from the drop in Aquila Tax-free's long position.The idea behind American Independence Kansas and Aquila Tax Free Trust 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.
| Aquila Tax-free vs. Aquila Churchill Tax | Aquila Tax-free vs. Aquila Three Peaks | Aquila Tax-free vs. Aquila Three Peaks | Aquila Tax-free vs. Aquila Three Peaks |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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