Correlation Between Access Flex and Transamerica High
Can any of the company-specific risk be diversified away by investing in both Access Flex and Transamerica 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 Access Flex and Transamerica High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Access Flex High and Transamerica High Yield, you can compare the effects of market volatilities on Access Flex and Transamerica 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 Access Flex with a short position of Transamerica High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Access Flex and Transamerica High.
Diversification Opportunities for Access Flex and Transamerica High
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Access and Transamerica is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Access Flex High and Transamerica High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica High Yield and Access Flex 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 Access Flex High are associated (or correlated) with Transamerica High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica High Yield has no effect on the direction of Access Flex i.e., Access Flex and Transamerica High go up and down completely randomly.
Pair Corralation between Access Flex and Transamerica High
Assuming the 90 days horizon Access Flex High is expected to generate 1.4 times more return on investment than Transamerica High. However, Access Flex is 1.4 times more volatile than Transamerica High Yield. It trades about 0.23 of its potential returns per unit of risk. Transamerica High Yield is currently generating about 0.2 per unit of risk. If you would invest 2,981 in Access Flex High on November 1, 2024 and sell it today you would earn a total of 36.00 from holding Access Flex High or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Access Flex High vs. Transamerica High Yield
Performance |
| Timeline |
| Access Flex High |
| Transamerica High Yield |
Access Flex and Transamerica High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Access Flex and Transamerica High
The main advantage of trading using opposite Access Flex and Transamerica High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Access Flex position performs unexpectedly, Transamerica 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 Transamerica High will offset losses from the drop in Transamerica High's long position.| Access Flex vs. Angel Oak Ultrashort | Access Flex vs. Transam Short Term Bond | Access Flex vs. Old Westbury Short Term | Access Flex vs. Siit Ultra Short |
| Transamerica High vs. Blackrock Global Longshort | Transamerica High vs. Angel Oak Ultrashort | Transamerica High vs. Siit Ultra Short | Transamerica High vs. Delaware Investments Ultrashort |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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