Correlation Between California High-yield and Ivy Apollo
Can any of the company-specific risk be diversified away by investing in both California High-yield and Ivy Apollo 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 California High-yield and Ivy Apollo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California High Yield Municipal and Ivy Apollo Multi Asset, you can compare the effects of market volatilities on California High-yield and Ivy Apollo 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 California High-yield with a short position of Ivy Apollo. Check out your portfolio center. Please also check ongoing floating volatility patterns of California High-yield and Ivy Apollo.
Diversification Opportunities for California High-yield and Ivy Apollo
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between California and Ivy is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding California High Yield Municipa and Ivy Apollo Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Apollo Multi and California 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 California High Yield Municipal are associated (or correlated) with Ivy Apollo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Apollo Multi has no effect on the direction of California High-yield i.e., California High-yield and Ivy Apollo go up and down completely randomly.
Pair Corralation between California High-yield and Ivy Apollo
Assuming the 90 days horizon California High Yield Municipal is expected to generate 0.44 times more return on investment than Ivy Apollo. However, California High Yield Municipal is 2.26 times less risky than Ivy Apollo. It trades about 0.07 of its potential returns per unit of risk. Ivy Apollo Multi Asset is currently generating about 0.03 per unit of risk. If you would invest 897.00 in California High Yield Municipal on August 30, 2024 and sell it today you would earn a total of 96.00 from holding California High Yield Municipal or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
California High Yield Municipa vs. Ivy Apollo Multi Asset
Performance |
| Timeline |
| California High Yield |
| Ivy Apollo Multi |
California High-yield and Ivy Apollo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California High-yield and Ivy Apollo
The main advantage of trading using opposite California High-yield and Ivy Apollo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California High-yield position performs unexpectedly, Ivy Apollo 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 Ivy Apollo will offset losses from the drop in Ivy Apollo's long position.| California High-yield vs. Davis Financial Fund | California High-yield vs. Icon Financial Fund | California High-yield vs. Financial Industries Fund | California High-yield vs. Transamerica Financial Life |
| Ivy Apollo vs. Victory High Income | Ivy Apollo vs. Pace High Yield | Ivy Apollo vs. Morningstar Aggressive Growth | Ivy Apollo vs. California High Yield Municipal |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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