Correlation Between Catalyst/smh High and Prudential High
Can any of the company-specific risk be diversified away by investing in both Catalyst/smh High and Prudential 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 Catalyst/smh High and Prudential High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystsmh High Income and Prudential High Yield, you can compare the effects of market volatilities on Catalyst/smh High and Prudential 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 Catalyst/smh High with a short position of Prudential High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/smh High and Prudential High.
Diversification Opportunities for Catalyst/smh High and Prudential High
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalyst/smh and Prudential is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Catalystsmh High Income and Prudential High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential High Yield and Catalyst/smh High 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 Catalystsmh High Income are associated (or correlated) with Prudential High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential High Yield has no effect on the direction of Catalyst/smh High i.e., Catalyst/smh High and Prudential High go up and down completely randomly.
Pair Corralation between Catalyst/smh High and Prudential High
Assuming the 90 days horizon Catalystsmh High Income is expected to generate 1.42 times more return on investment than Prudential High. However, Catalyst/smh High is 1.42 times more volatile than Prudential High Yield. It trades about 0.14 of its potential returns per unit of risk. Prudential High Yield is currently generating about 0.15 per unit of risk. If you would invest 360.00 in Catalystsmh High Income on November 2, 2024 and sell it today you would earn a total of 14.00 from holding Catalystsmh High Income or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystsmh High Income vs. Prudential High Yield
Performance |
| Timeline |
| Catalystsmh High Income |
| Prudential High Yield |
Catalyst/smh High and Prudential High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/smh High and Prudential High
The main advantage of trading using opposite Catalyst/smh High and Prudential High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/smh High position performs unexpectedly, Prudential 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 Prudential High will offset losses from the drop in Prudential High's long position.| Catalyst/smh High vs. Dws Global Macro | Catalyst/smh High vs. Alliancebernstein Global Highome | Catalyst/smh High vs. Ms Global Fixed | Catalyst/smh High vs. Ab Global Bond |
| Prudential High vs. Fisher Large Cap | Prudential High vs. Hartford Moderate Allocation | Prudential High vs. Alternative Asset Allocation | Prudential High vs. Balanced Allocation 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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