Correlation Between High Yield and Certara

Can any of the company-specific risk be diversified away by investing in both High Yield and Certara 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 Certara into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between High Yield Municipal Fund and Certara, you can compare the effects of market volatilities on High Yield and Certara 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 Certara. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Certara.

Diversification Opportunities for High Yield and Certara

-0.49

Correlation Coefficient

High Yield  Certara

Very good diversification

The 3 months correlation between High and Certara is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and Certara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Certara 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 Municipal Fund are associated (or correlated) with Certara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Certara has no effect on the direction of High Yield i.e., High Yield and Certara go up and down completely randomly.

Pair Corralation between High Yield and Certara

Assuming the 90 days horizon High Yield Municipal Fund is expected to generate 0.08 times more return on investment than Certara. However, High Yield Municipal Fund is 12.46 times less risky than Certara. It trades about 0.24 of its potential returns per unit of risk. Certara is currently generating about -0.29 per unit of risk. If you would invest  878.00  in High Yield Municipal Fund on March 21, 2024 and sell it today you would earn a total of  11.00  from holding High Yield Municipal Fund or generate 1.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

High Yield Municipal Fund  vs.  Certara

High Yield Municipal

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in High Yield Municipal Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, High Yield is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Certara

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Certara has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with High Yield and Certara

The main advantage of trading using opposite High Yield and Certara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, Certara 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 Certara will offset losses from the drop in Certara's long position.

The idea behind High Yield Municipal Fund and Certara 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.