Correlation Between High-yield Municipal and Anglo American
Can any of the company-specific risk be diversified away by investing in both High-yield Municipal and Anglo American 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 Municipal and Anglo American 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 Anglo American Platinum, you can compare the effects of market volatilities on High-yield Municipal and Anglo American 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 Municipal with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of High-yield Municipal and Anglo American.
Diversification Opportunities for High-yield Municipal and Anglo American
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between High-yield and Anglo is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and Anglo American Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American Platinum and High-yield Municipal 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 Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American Platinum has no effect on the direction of High-yield Municipal i.e., High-yield Municipal and Anglo American go up and down completely randomly.
Pair Corralation between High-yield Municipal and Anglo American
Assuming the 90 days horizon High-yield Municipal is expected to generate 1.73 times less return on investment than Anglo American. But when comparing it to its historical volatility, High Yield Municipal Fund is 14.24 times less risky than Anglo American. It trades about 0.15 of its potential returns per unit of risk. Anglo American Platinum is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,306 in Anglo American Platinum on August 29, 2024 and sell it today you would lose (14.00) from holding Anglo American Platinum or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
High Yield Municipal Fund vs. Anglo American Platinum
Performance |
| Timeline |
| High Yield Municipal |
| Anglo American Platinum |
High-yield Municipal and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High-yield Municipal and Anglo American
The main advantage of trading using opposite High-yield Municipal and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High-yield Municipal position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| High-yield Municipal vs. High Yield Fund Investor | High-yield Municipal vs. Intermediate Term Tax Free Bond | High-yield Municipal vs. California High Yield Municipal | High-yield Municipal vs. T Rowe Price |
| Anglo American vs. Rave Restaurant Group | Anglo American vs. First Watch Restaurant | Anglo American vs. Sweetgreen | Anglo American vs. Kura Sushi USA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |