Correlation Between REX FANG and High-yield Municipal
Can any of the company-specific risk be diversified away by investing in both REX FANG and High-yield Municipal 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 REX FANG and High-yield Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REX FANG Innovation and High Yield Municipal Fund, you can compare the effects of market volatilities on REX FANG and High-yield Municipal 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 REX FANG with a short position of High-yield Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of REX FANG and High-yield Municipal.
Diversification Opportunities for REX FANG and High-yield Municipal
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between REX and High-yield is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding REX FANG Innovation and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal and REX FANG 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 REX FANG Innovation are associated (or correlated) with High-yield Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of REX FANG i.e., REX FANG and High-yield Municipal go up and down completely randomly.
Pair Corralation between REX FANG and High-yield Municipal
Given the investment horizon of 90 days REX FANG Innovation is expected to generate 3.47 times more return on investment than High-yield Municipal. However, REX FANG is 3.47 times more volatile than High Yield Municipal Fund. It trades about 0.11 of its potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.07 per unit of risk. If you would invest 3,877 in REX FANG Innovation on August 26, 2024 and sell it today you would earn a total of 1,328 from holding REX FANG Innovation or generate 34.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.15% |
| Values | Daily Returns |
REX FANG Innovation vs. High Yield Municipal Fund
Performance |
| Timeline |
| REX FANG Innovation |
| High Yield Municipal |
REX FANG and High-yield Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REX FANG and High-yield Municipal
The main advantage of trading using opposite REX FANG and High-yield Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REX FANG position performs unexpectedly, High-yield Municipal 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 High-yield Municipal will offset losses from the drop in High-yield Municipal's long position.| REX FANG vs. iShares Dividend and | REX FANG vs. Martin Currie Sustainable | REX FANG vs. VictoryShares THB Mid | REX FANG vs. Mast Global Battery |
| High-yield Municipal vs. High Yield Fund Investor | High-yield Municipal vs. Intermediate Term Tax Free Bond | High-yield Municipal vs. California High Yield Municipal | High-yield Municipal vs. T Rowe Price |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |