Correlation Between Cornerstone Strategic and Palmer Square
Can any of the company-specific risk be diversified away by investing in both Cornerstone Strategic and Palmer Square 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 Cornerstone Strategic and Palmer Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornerstone Strategic Value and Palmer Square Ssi, you can compare the effects of market volatilities on Cornerstone Strategic and Palmer Square 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 Cornerstone Strategic with a short position of Palmer Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Strategic and Palmer Square.
Diversification Opportunities for Cornerstone Strategic and Palmer Square
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cornerstone and Palmer is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value and Palmer Square Ssi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palmer Square Ssi and Cornerstone Strategic 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 Cornerstone Strategic Value are associated (or correlated) with Palmer Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palmer Square Ssi has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Palmer Square go up and down completely randomly.
Pair Corralation between Cornerstone Strategic and Palmer Square
Considering the 90-day investment horizon Cornerstone Strategic Value is expected to generate 13.05 times more return on investment than Palmer Square. However, Cornerstone Strategic is 13.05 times more volatile than Palmer Square Ssi. It trades about 0.62 of its potential returns per unit of risk. Palmer Square Ssi is currently generating about 0.68 per unit of risk. If you would invest 791.00 in Cornerstone Strategic Value on August 28, 2024 and sell it today you would earn a total of 95.00 from holding Cornerstone Strategic Value or generate 12.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cornerstone Strategic Value vs. Palmer Square Ssi
Performance |
| Timeline |
| Cornerstone Strategic |
| Palmer Square Ssi |
Cornerstone Strategic and Palmer Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornerstone Strategic and Palmer Square
The main advantage of trading using opposite Cornerstone Strategic and Palmer Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornerstone Strategic position performs unexpectedly, Palmer Square 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 Palmer Square will offset losses from the drop in Palmer Square's long position.The idea behind Cornerstone Strategic Value and Palmer Square Ssi pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Palmer Square vs. Pimco Short Asset | Palmer Square vs. Doubleline Low Duration | Palmer Square vs. Dfa One Year Fixed | Palmer Square vs. Short Term Income 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |