Correlation Between Robinson Opportunistic and High Yield

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

By analyzing existing cross correlation between Robinson Opportunistic Income and High Yield Strategy, you can compare the effects of market volatilities on Robinson Opportunistic and High Yield 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 Robinson Opportunistic with a short position of High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robinson Opportunistic and High Yield.

Diversification Opportunities for Robinson Opportunistic and High Yield

0.53

Correlation Coefficient

Robinson Opportunistic  High Yield

Very weak diversification

The 3 months correlation between Robinson and High is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Robinson Opportunistic Income and High Yield Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Strategy and Robinson Opportunistic 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 Robinson Opportunistic Income are associated (or correlated) with High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Strategy has no effect on the direction of Robinson Opportunistic i.e., Robinson Opportunistic and High Yield go up and down completely randomly.

Pair Corralation between Robinson Opportunistic and High Yield

Assuming the 90 days horizon Robinson Opportunistic Income is expected to generate 0.73 times more return on investment than High Yield. However, Robinson Opportunistic Income is 1.36 times less risky than High Yield. It trades about 0.12 of its potential returns per unit of risk. High Yield Strategy is currently generating about -0.02 per unit of risk. If you would invest  952.00  in Robinson Opportunistic Income on January 25, 2024 and sell it today you would earn a total of  21.00  from holding Robinson Opportunistic Income or generate 2.21% return on investment over 90 days.

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

Robinson Opportunistic Income  vs.  High Yield Strategy

Robinson Opportunistic

Risk-Adjusted Performance

9 of 100

OK

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

High Yield Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days High Yield Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, High Yield is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Robinson Opportunistic and High Yield

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

The idea behind Robinson Opportunistic Income and High Yield Strategy 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.