Correlation Between Matson Money and California Municipal
Can any of the company-specific risk be diversified away by investing in both Matson Money and California 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 Matson Money and California Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matson Money Equity and California Municipal Portfolio, you can compare the effects of market volatilities on Matson Money and California 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 Matson Money with a short position of California Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and California Municipal.
Diversification Opportunities for Matson Money and California Municipal
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Matson and California is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and California Municipal Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Municipal and Matson Money 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 Matson Money Equity are associated (or correlated) with California Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Municipal has no effect on the direction of Matson Money i.e., Matson Money and California Municipal go up and down completely randomly.
Pair Corralation between Matson Money and California Municipal
Assuming the 90 days horizon Matson Money Equity is expected to generate 6.1 times more return on investment than California Municipal. However, Matson Money is 6.1 times more volatile than California Municipal Portfolio. It trades about 0.06 of its potential returns per unit of risk. California Municipal Portfolio is currently generating about 0.02 per unit of risk. If you would invest 3,123 in Matson Money Equity on June 1, 2025 and sell it today you would earn a total of 296.00 from holding Matson Money Equity or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matson Money Equity vs. California Municipal Portfolio
Performance |
| Timeline |
| Matson Money Equity |
| California Municipal |
Matson Money and California Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matson Money and California Municipal
The main advantage of trading using opposite Matson Money and California Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money position performs unexpectedly, California 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 California Municipal will offset losses from the drop in California Municipal's long position.| Matson Money vs. Baron Real Estate | Matson Money vs. Global Real Estate | Matson Money vs. Rreef Property Trust | Matson Money vs. Great West Real Estate |
| California Municipal vs. Ab Global E | California Municipal vs. Ab Global E | California Municipal vs. Ab Global E | California Municipal vs. Ab All Market |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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