Correlation Between High Yield and UNIVERSAL SOLAR
Can any of the company-specific risk be diversified away by investing in both High Yield and UNIVERSAL SOLAR 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 UNIVERSAL SOLAR 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 UNIVERSAL SOLAR TECHNOLOGY, you can compare the effects of market volatilities on High Yield and UNIVERSAL SOLAR 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 UNIVERSAL SOLAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and UNIVERSAL SOLAR.
Diversification Opportunities for High Yield and UNIVERSAL SOLAR
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between High and UNIVERSAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and UNIVERSAL SOLAR TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVERSAL SOLAR TECH 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 UNIVERSAL SOLAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVERSAL SOLAR TECH has no effect on the direction of High Yield i.e., High Yield and UNIVERSAL SOLAR go up and down completely randomly.
Pair Corralation between High Yield and UNIVERSAL SOLAR
Assuming the 90 days horizon High Yield is expected to generate 138.89 times less return on investment than UNIVERSAL SOLAR. But when comparing it to its historical volatility, High Yield Municipal Fund is 225.79 times less risky than UNIVERSAL SOLAR. It trades about 0.09 of its potential returns per unit of risk. UNIVERSAL SOLAR TECHNOLOGY is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.17 in UNIVERSAL SOLAR TECHNOLOGY on September 14, 2024 and sell it today you would lose (0.16) from holding UNIVERSAL SOLAR TECHNOLOGY or give up 94.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Municipal Fund vs. UNIVERSAL SOLAR TECHNOLOGY
Performance |
| Timeline |
| High Yield Municipal |
| UNIVERSAL SOLAR TECH |
High Yield and UNIVERSAL SOLAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and UNIVERSAL SOLAR
The main advantage of trading using opposite High Yield and UNIVERSAL SOLAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, UNIVERSAL SOLAR 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 UNIVERSAL SOLAR will offset losses from the drop in UNIVERSAL SOLAR'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 |
| UNIVERSAL SOLAR vs. Aquagold International | UNIVERSAL SOLAR vs. Morningstar Unconstrained Allocation | UNIVERSAL SOLAR vs. Thrivent High Yield | UNIVERSAL SOLAR vs. High Yield Municipal Fund |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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