Correlation Between American High and Muzinich
Can any of the company-specific risk be diversified away by investing in both American High and Muzinich 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 American High and Muzinich into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American High Income and Muzinich High Yield, you can compare the effects of market volatilities on American High and Muzinich 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 American High with a short position of Muzinich. Check out your portfolio center. Please also check ongoing floating volatility patterns of American High and Muzinich.
Diversification Opportunities for American High and Muzinich
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Muzinich is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding American High Income and Muzinich High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muzinich High Yield and American High 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 American High Income are associated (or correlated) with Muzinich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muzinich High Yield has no effect on the direction of American High i.e., American High and Muzinich go up and down completely randomly.
Pair Corralation between American High and Muzinich
Assuming the 90 days horizon American High is expected to generate 1.18 times less return on investment than Muzinich. But when comparing it to its historical volatility, American High Income is 1.27 times less risky than Muzinich. It trades about 0.22 of its potential returns per unit of risk. Muzinich High Yield is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 795.00 in Muzinich High Yield on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Muzinich High Yield or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
American High Income vs. Muzinich High Yield
Performance |
| Timeline |
| American High Income |
| Muzinich High Yield |
American High and Muzinich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American High and Muzinich
The main advantage of trading using opposite American High and Muzinich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American High position performs unexpectedly, Muzinich 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 Muzinich will offset losses from the drop in Muzinich's long position.| American High vs. Bond Fund Of | American High vs. Capital World Bond | American High vs. Intermediate Bond Fund | American High vs. Europacific Growth Fund |
| Muzinich vs. Muzinich Credit Opportunities | Muzinich vs. Muzinich Low Duration | Muzinich vs. Fidelity Advisor Balanced | Muzinich vs. Schwab Sp 500 |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |