Correlation Between Aam/himco Short and Catalyst/smh High
Can any of the company-specific risk be diversified away by investing in both Aam/himco Short and Catalyst/smh High 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 Aam/himco Short and Catalyst/smh High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aamhimco Short Duration and Catalystsmh High Income, you can compare the effects of market volatilities on Aam/himco Short and Catalyst/smh High 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 Aam/himco Short with a short position of Catalyst/smh High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam/himco Short and Catalyst/smh High.
Diversification Opportunities for Aam/himco Short and Catalyst/smh High
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aam/himco and Catalyst/smh is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aamhimco Short Duration and Catalystsmh High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh High Income and Aam/himco Short 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 Aamhimco Short Duration are associated (or correlated) with Catalyst/smh High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh High Income has no effect on the direction of Aam/himco Short i.e., Aam/himco Short and Catalyst/smh High go up and down completely randomly.
Pair Corralation between Aam/himco Short and Catalyst/smh High
Assuming the 90 days horizon Aamhimco Short Duration is expected to generate 0.37 times more return on investment than Catalyst/smh High. However, Aamhimco Short Duration is 2.74 times less risky than Catalyst/smh High. It trades about -0.17 of its potential returns per unit of risk. Catalystsmh High Income is currently generating about -0.19 per unit of risk. If you would invest 1,004 in Aamhimco Short Duration on October 10, 2024 and sell it today you would lose (4.00) from holding Aamhimco Short Duration or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aamhimco Short Duration vs. Catalystsmh High Income
Performance |
| Timeline |
| Aamhimco Short Duration |
| Catalystsmh High Income |
Aam/himco Short and Catalyst/smh High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam/himco Short and Catalyst/smh High
The main advantage of trading using opposite Aam/himco Short and Catalyst/smh High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam/himco Short position performs unexpectedly, Catalyst/smh High 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 Catalyst/smh High will offset losses from the drop in Catalyst/smh High's long position.| Aam/himco Short vs. L Abbett Growth | Aam/himco Short vs. Mairs Power Growth | Aam/himco Short vs. Morningstar Aggressive Growth | Aam/himco Short vs. Transamerica Capital Growth |
| Catalyst/smh High vs. Profunds Large Cap Growth | Catalyst/smh High vs. M Large Cap | Catalyst/smh High vs. Americafirst Large Cap | Catalyst/smh High vs. Qs Large Cap |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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