Correlation Between High Yield and Phonex
Can any of the company-specific risk be diversified away by investing in both High Yield and Phonex 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 and Phonex 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 Phonex Inc, you can compare the effects of market volatilities on High Yield and Phonex 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 with a short position of Phonex. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Phonex.
Diversification Opportunities for High Yield and Phonex
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between High and Phonex is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and Phonex Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phonex Inc and High Yield 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 Phonex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phonex Inc has no effect on the direction of High Yield i.e., High Yield and Phonex go up and down completely randomly.
Pair Corralation between High Yield and Phonex
Assuming the 90 days horizon High Yield is expected to generate 5.7 times less return on investment than Phonex. But when comparing it to its historical volatility, High Yield Municipal Fund is 9.63 times less risky than Phonex. It trades about 0.05 of its potential returns per unit of risk. Phonex Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Phonex Inc on September 12, 2024 and sell it today you would earn a total of 3.00 from holding Phonex Inc or generate 2.8% 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. Phonex Inc
Performance |
| Timeline |
| High Yield Municipal |
| Phonex Inc |
High Yield and Phonex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Phonex
The main advantage of trading using opposite High Yield and Phonex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, Phonex 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 Phonex will offset losses from the drop in Phonex's long position.| High Yield vs. High Yield Fund Investor | High Yield vs. Intermediate Term Tax Free Bond | High Yield vs. California High Yield Municipal | High Yield vs. T Rowe Price |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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