Correlation Between High-yield Fund and American High
Can any of the company-specific risk be diversified away by investing in both High-yield Fund 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 High-yield Fund and American High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Fund R6 and American High Income, you can compare the effects of market volatilities on High-yield Fund 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 High-yield Fund with a short position of American High. Check out your portfolio center. Please also check ongoing floating volatility patterns of High-yield Fund and American High.
Diversification Opportunities for High-yield Fund and American High
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between High-yield and American is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Fund R6 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 High-yield Fund 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 R6 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 High-yield Fund i.e., High-yield Fund and American High go up and down completely randomly.
Pair Corralation between High-yield Fund and American High
Assuming the 90 days horizon High-yield Fund is expected to generate 1.29 times less return on investment than American High. In addition to that, High-yield Fund is 1.05 times more volatile than American High Income. It trades about 0.09 of its total potential returns per unit of risk. American High Income is currently generating about 0.12 per unit of volatility. If you would invest 850.00 in American High Income on January 24, 2024 and sell it today you would earn a total of 90.00 from holding American High Income or generate 10.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
High Yield Fund R6 vs. American High Income
Performance |
Timeline |
High Yield Fund |
American High Me |
High-yield Fund and American High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with High-yield Fund and American High
The main advantage of trading using opposite High-yield Fund and American High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High-yield Fund 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.High-yield Fund vs. Mid Cap Value | High-yield Fund vs. Equity Growth Fund | High-yield Fund vs. Income Growth Fund | High-yield Fund vs. Diversified Bond Fund |
American High vs. Income Fund Of | American High vs. New World Fund | American High vs. American Mutual Fund | American High vs. American Mutual Fund |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |