Correlation Between High Yield and Shaniv
Can any of the company-specific risk be diversified away by investing in both High Yield and Shaniv 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 High Yield and Shaniv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Fund and Shaniv, you can compare the effects of market volatilities on High Yield and Shaniv 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 High Yield with a short position of Shaniv. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Shaniv.
Diversification Opportunities for High Yield and Shaniv
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between High and Shaniv is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Fund and Shaniv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaniv and High Yield 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 High Yield Fund are associated (or correlated) with Shaniv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaniv has no effect on the direction of High Yield i.e., High Yield and Shaniv go up and down completely randomly.
Pair Corralation between High Yield and Shaniv
Assuming the 90 days horizon High Yield Fund is expected to generate 0.26 times more return on investment than Shaniv. However, High Yield Fund is 3.92 times less risky than Shaniv. It trades about 0.04 of its potential returns per unit of risk. Shaniv is currently generating about -0.03 per unit of risk. If you would invest 712.00 in High Yield Fund on January 20, 2024 and sell it today you would earn a total of 68.00 from holding High Yield Fund or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 79.35% |
| Values | Daily Returns |
High Yield Fund vs. Shaniv
Performance |
| Timeline |
| High Yield Fund |
| Shaniv |
High Yield and Shaniv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Shaniv
The main advantage of trading using opposite High Yield and Shaniv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, Shaniv 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 Shaniv will offset losses from the drop in Shaniv's long position.| High Yield vs. Pimco Rae Worldwide | High Yield vs. Pimco Rae Worldwide | High Yield vs. Pimco Rae Worldwide | High Yield vs. Pimco Rae Worldwide |
| Shaniv vs. Elbit Systems | Shaniv vs. Bezeq Israeli Telecommunication | Shaniv vs. Bank Hapoalim | Shaniv vs. Teva Pharmaceutical Industries |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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