Correlation Between American High and Catalystsmh High
Can any of the company-specific risk be diversified away by investing in both American High and Catalystsmh High 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 High and Catalystsmh High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American High Income and Catalystsmh High Income, you can compare the effects of market volatilities on American High and Catalystsmh High 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 High with a short position of Catalystsmh High. Check out your portfolio center. Please also check ongoing floating volatility patterns of American High and Catalystsmh High.
Diversification Opportunities for American High and Catalystsmh High
0.7 | Correlation Coefficient |
Poor diversification
The 1 month correlation between American and Catalystsmh is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding American High Income and Catalystsmh High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh High Income and American High 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 High Income are associated (or correlated) with Catalystsmh High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh High Income has no effect on the direction of American High i.e., American High and Catalystsmh High go up and down completely randomly.
Pair Corralation between American High and Catalystsmh High
Assuming the 90 days horizon American High Income is expected to generate 0.58 times more return on investment than Catalystsmh High. However, American High Income is 1.73 times less risky than Catalystsmh High. It trades about -0.07 of its potential returns per unit of risk. Catalystsmh High Income is currently generating about -0.21 per unit of risk. If you would invest 958.00 in American High Income on March 5, 2024 and sell it today you would lose (2.00) from holding American High Income or give up 0.21% of portfolio value over 90 days.
Time Period | 1 Month [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
American High Income vs. Catalystsmh High Income
Performance |
Timeline |
American High Income |
Catalystsmh High Income |
American High and Catalystsmh High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American High and Catalystsmh High
The main advantage of trading using opposite American High and Catalystsmh High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American High position performs unexpectedly, Catalystsmh High 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 Catalystsmh High will offset losses from the drop in Catalystsmh High's long position.American High vs. Bond Fund Of | American High vs. Capital World Bond | American High vs. Intermediate Bond Fund | American High vs. Europacific Growth Fund |
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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 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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