Correlation Between High-yield Municipal and BEST
Can any of the company-specific risk be diversified away by investing in both High-yield Municipal and BEST 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 BEST 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 BEST Inc, you can compare the effects of market volatilities on High-yield Municipal and BEST 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 BEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of High-yield Municipal and BEST.
Diversification Opportunities for High-yield Municipal and BEST
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between High-yield and BEST is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and BEST Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEST Inc 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 BEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEST Inc has no effect on the direction of High-yield Municipal i.e., High-yield Municipal and BEST go up and down completely randomly.
Pair Corralation between High-yield Municipal and BEST
Assuming the 90 days horizon High Yield Municipal Fund is expected to generate 1.18 times more return on investment than BEST. However, High-yield Municipal is 1.18 times more volatile than BEST Inc. It trades about 0.1 of its potential returns per unit of risk. BEST Inc is currently generating about -0.11 per unit of risk. If you would invest 889.00 in High Yield Municipal Fund on August 27, 2024 and sell it today you would earn a total of 7.00 from holding High Yield Municipal Fund or generate 0.79% 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. BEST Inc
Performance |
| Timeline |
| High Yield Municipal |
| BEST Inc |
High-yield Municipal and BEST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High-yield Municipal and BEST
The main advantage of trading using opposite High-yield Municipal and BEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High-yield Municipal position performs unexpectedly, BEST 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 BEST will offset losses from the drop in BEST'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 |
| BEST vs. Heartland Express | BEST vs. Universal Logistics Holdings | BEST vs. Marten Transport | BEST vs. Werner Enterprises |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |