Correlation Between Chestnut Street and Simt High
Can any of the company-specific risk be diversified away by investing in both Chestnut Street and Simt 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 Chestnut Street and Simt High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chestnut Street Exchange and Simt High Yield, you can compare the effects of market volatilities on Chestnut Street and Simt 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 Chestnut Street with a short position of Simt High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and Simt High.
Diversification Opportunities for Chestnut Street and Simt High
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chestnut and Simt is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange and Simt High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt High Yield and Chestnut Street 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 Chestnut Street Exchange are associated (or correlated) with Simt High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt High Yield has no effect on the direction of Chestnut Street i.e., Chestnut Street and Simt High go up and down completely randomly.
Pair Corralation between Chestnut Street and Simt High
Assuming the 90 days horizon Chestnut Street Exchange is expected to generate 3.95 times more return on investment than Simt High. However, Chestnut Street is 3.95 times more volatile than Simt High Yield. It trades about 0.38 of its potential returns per unit of risk. Simt High Yield is currently generating about 0.06 per unit of risk. If you would invest 112,550 in Chestnut Street Exchange on November 6, 2024 and sell it today you would earn a total of 5,343 from holding Chestnut Street Exchange or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chestnut Street Exchange vs. Simt High Yield
Performance |
| Timeline |
| Chestnut Street Exchange |
| Simt High Yield |
Chestnut Street and Simt High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chestnut Street and Simt High
The main advantage of trading using opposite Chestnut Street and Simt High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street position performs unexpectedly, Simt 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 Simt High will offset losses from the drop in Simt High's long position.| Chestnut Street vs. Baird Quality Intermediate | Chestnut Street vs. Bbh Intermediate Municipal | Chestnut Street vs. Ultra Short Fixed Income | Chestnut Street vs. Barings High Yield |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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