Correlation Between Strategic Enhanced and Cavanal Hill
Can any of the company-specific risk be diversified away by investing in both Strategic Enhanced and Cavanal Hill 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 Strategic Enhanced and Cavanal Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Enhanced Yield and Cavanal Hill Hedged, you can compare the effects of market volatilities on Strategic Enhanced and Cavanal Hill 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 Strategic Enhanced with a short position of Cavanal Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Enhanced and Cavanal Hill.
Diversification Opportunities for Strategic Enhanced and Cavanal Hill
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Strategic and Cavanal is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Enhanced Yield and Cavanal Hill Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cavanal Hill Hedged and Strategic Enhanced 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 Strategic Enhanced Yield are associated (or correlated) with Cavanal Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cavanal Hill Hedged has no effect on the direction of Strategic Enhanced i.e., Strategic Enhanced and Cavanal Hill go up and down completely randomly.
Pair Corralation between Strategic Enhanced and Cavanal Hill
Assuming the 90 days horizon Strategic Enhanced is expected to generate 1.97 times less return on investment than Cavanal Hill. But when comparing it to its historical volatility, Strategic Enhanced Yield is 1.51 times less risky than Cavanal Hill. It trades about 0.07 of its potential returns per unit of risk. Cavanal Hill Hedged is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 987.00 in Cavanal Hill Hedged on August 31, 2024 and sell it today you would earn a total of 170.00 from holding Cavanal Hill Hedged or generate 17.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Enhanced Yield vs. Cavanal Hill Hedged
Performance |
| Timeline |
| Strategic Enhanced Yield |
| Cavanal Hill Hedged |
Strategic Enhanced and Cavanal Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Enhanced and Cavanal Hill
The main advantage of trading using opposite Strategic Enhanced and Cavanal Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Enhanced position performs unexpectedly, Cavanal Hill 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 Cavanal Hill will offset losses from the drop in Cavanal Hill's long position.The idea behind Strategic Enhanced Yield and Cavanal Hill Hedged 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.
| Cavanal Hill vs. Aam Select Income | Cavanal Hill vs. Arrow Managed Futures | Cavanal Hill vs. Scharf Global Opportunity | Cavanal Hill vs. Qs Large Cap |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |