Correlation Between High Yield and CrossFirst Bankshares
Can any of the company-specific risk be diversified away by investing in both High Yield and CrossFirst Bankshares 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 CrossFirst Bankshares 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 CrossFirst Bankshares, you can compare the effects of market volatilities on High Yield and CrossFirst Bankshares 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 CrossFirst Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and CrossFirst Bankshares.
Diversification Opportunities for High Yield and CrossFirst Bankshares
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between High and CrossFirst is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and CrossFirst Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrossFirst Bankshares 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 CrossFirst Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrossFirst Bankshares has no effect on the direction of High Yield i.e., High Yield and CrossFirst Bankshares go up and down completely randomly.
Pair Corralation between High Yield and CrossFirst Bankshares
Assuming the 90 days horizon High Yield Municipal Fund is expected to generate 0.21 times more return on investment than CrossFirst Bankshares. However, High Yield Municipal Fund is 4.79 times less risky than CrossFirst Bankshares. It trades about 0.25 of its potential returns per unit of risk. CrossFirst Bankshares is currently generating about -0.25 per unit of risk. If you would invest 878.00 in High Yield Municipal Fund on March 18, 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 Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
High Yield Municipal Fund vs. CrossFirst Bankshares
Performance |
Timeline |
High Yield Municipal |
CrossFirst Bankshares |
High Yield and CrossFirst Bankshares Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with High Yield and CrossFirst Bankshares
The main advantage of trading using opposite High Yield and CrossFirst Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, CrossFirst Bankshares 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 CrossFirst Bankshares will offset losses from the drop in CrossFirst Bankshares' long position.High Yield vs. High Yield Fund Investor | High Yield vs. Intermediate Term Tax Free Bond | High Yield vs. California High Yield Municipal | High Yield vs. T Rowe Price |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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