Correlation Between High Yield and Hancock Whitney

Can any of the company-specific risk be diversified away by investing in both High Yield and Hancock Whitney 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 Hancock Whitney 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 Hancock Whitney Corp, you can compare the effects of market volatilities on High Yield and Hancock Whitney 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 Hancock Whitney. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Hancock Whitney.

Diversification Opportunities for High Yield and Hancock Whitney

0.27

Correlation Coefficient

High Yield  Hancock Whitney

Modest diversification

The 3 months correlation between High and Hancock is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and Hancock Whitney Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancock Whitney Corp 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 Hancock Whitney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancock Whitney Corp has no effect on the direction of High Yield i.e., High Yield and Hancock Whitney go up and down completely randomly.

Pair Corralation between High Yield and Hancock Whitney

Assuming the 90 days horizon High Yield Municipal Fund is expected to generate 0.14 times more return on investment than Hancock Whitney. However, High Yield Municipal Fund is 6.9 times less risky than Hancock Whitney. It trades about 0.29 of its potential returns per unit of risk. Hancock Whitney Corp is currently generating about 0.0 per unit of risk. If you would invest  865.00  in High Yield Municipal Fund on March 22, 2024 and sell it today you would earn a total of  23.00  from holding High Yield Municipal Fund or generate 2.66% return on investment over 90 days.

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

High Yield Municipal Fund  vs.  Hancock Whitney Corp

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Hancock Whitney Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hancock Whitney Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Hancock Whitney is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with High Yield and Hancock Whitney

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

The idea behind High Yield Municipal Fund and Hancock Whitney Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.