Correlation Between High-yield Municipal and Edible Garden
Can any of the company-specific risk be diversified away by investing in both High-yield Municipal and Edible Garden 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 Edible Garden 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 Edible Garden AG, you can compare the effects of market volatilities on High-yield Municipal and Edible Garden 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 Edible Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of High-yield Municipal and Edible Garden.
Diversification Opportunities for High-yield Municipal and Edible Garden
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between High-yield and Edible is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and Edible Garden AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edible Garden AG 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 Edible Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edible Garden AG has no effect on the direction of High-yield Municipal i.e., High-yield Municipal and Edible Garden go up and down completely randomly.
Pair Corralation between High-yield Municipal and Edible Garden
Assuming the 90 days horizon High-yield Municipal is expected to generate 21.21 times less return on investment than Edible Garden. But when comparing it to its historical volatility, High Yield Municipal Fund is 17.55 times less risky than Edible Garden. It trades about 0.14 of its potential returns per unit of risk. Edible Garden AG is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Edible Garden AG on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Edible Garden AG or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Municipal Fund vs. Edible Garden AG
Performance |
| Timeline |
| High Yield Municipal |
| Edible Garden AG |
High-yield Municipal and Edible Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High-yield Municipal and Edible Garden
The main advantage of trading using opposite High-yield Municipal and Edible Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High-yield Municipal position performs unexpectedly, Edible Garden 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 Edible Garden will offset losses from the drop in Edible Garden'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 |
| Edible Garden vs. Golden Agri Resources | Edible Garden vs. Vital Farms | Edible Garden vs. Local Bounti Corp | Edible Garden vs. Fresh Del Monte |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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