Correlation Between Power Floating and Power Dividend
Can any of the company-specific risk be diversified away by investing in both Power Floating and Power Dividend 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 Power Floating and Power Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Floating Rate and Power Dividend Index, you can compare the effects of market volatilities on Power Floating and Power Dividend 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 Power Floating with a short position of Power Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Floating and Power Dividend.
Diversification Opportunities for Power Floating and Power Dividend
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Power and Power is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Power Floating Rate and Power Dividend Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Dividend Index and Power Floating 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 Power Floating Rate are associated (or correlated) with Power Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Dividend Index has no effect on the direction of Power Floating i.e., Power Floating and Power Dividend go up and down completely randomly.
Pair Corralation between Power Floating and Power Dividend
Assuming the 90 days horizon Power Floating is expected to generate 8.48 times less return on investment than Power Dividend. But when comparing it to its historical volatility, Power Floating Rate is 10.3 times less risky than Power Dividend. It trades about 0.34 of its potential returns per unit of risk. Power Dividend Index is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 940.00 in Power Dividend Index on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Power Dividend Index or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Floating Rate vs. Power Dividend Index
Performance |
| Timeline |
| Power Floating Rate |
| Power Dividend Index |
Power Floating and Power Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Floating and Power Dividend
The main advantage of trading using opposite Power Floating and Power Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Floating position performs unexpectedly, Power Dividend 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 Power Dividend will offset losses from the drop in Power Dividend's long position.| Power Floating vs. Power Income Fund | Power Floating vs. Power Momentum Index | Power Floating vs. Power Momentum Index | Power Floating vs. Power Momentum Index |
| Power Dividend vs. T Rowe Price | Power Dividend vs. Kinetics Global Fund | Power Dividend vs. Scharf Global Opportunity | Power Dividend vs. Dreyfusstandish Global Fixed |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |