Correlation Between Pax High and American High
Can any of the company-specific risk be diversified away by investing in both Pax High and American 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 Pax High and American High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pax High Yield and American High Income, you can compare the effects of market volatilities on Pax High and American 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 Pax High with a short position of American High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pax High and American High.
Diversification Opportunities for Pax High and American High
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pax and American is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pax High Yield and American High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American High Me and Pax 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 Pax High Yield are associated (or correlated) with American High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American High Me has no effect on the direction of Pax High i.e., Pax High and American High go up and down completely randomly.
Pair Corralation between Pax High and American High
If you would invest 0.00 in American High Income on January 26, 2024 and sell it today you would earn a total of 0.00 from holding American High Income or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Pax High Yield vs. American High Income
Performance |
| Timeline |
| Pax High Yield |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American High Me |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Pax High and American High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pax High and American High
The main advantage of trading using opposite Pax High and American High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pax High position performs unexpectedly, American 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 American High will offset losses from the drop in American High's long position.| Pax High vs. Wilmington Diversified Income | Pax High vs. Stone Ridge Diversified | Pax High vs. Federated Hermes Conservative | Pax High vs. Wealthbuilder Conservative Allocation |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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