Correlation Between Catalyst/smh High and High Yield
Can any of the company-specific risk be diversified away by investing in both Catalyst/smh High and High Yield 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 High Yield 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 High Yield Bond, you can compare the effects of market volatilities on Catalyst/smh High and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/smh High and High Yield.
Diversification Opportunities for Catalyst/smh High and High Yield
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalyst/smh and High is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Catalystsmh High Income and High Yield Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Bond 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 High Yield. 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 Bond has no effect on the direction of Catalyst/smh High i.e., Catalyst/smh High and High Yield go up and down completely randomly.
Pair Corralation between Catalyst/smh High and High Yield
Assuming the 90 days horizon Catalystsmh High Income is expected to generate 1.76 times more return on investment than High Yield. However, Catalyst/smh High is 1.76 times more volatile than High Yield Bond. It trades about 0.21 of its potential returns per unit of risk. High Yield Bond is currently generating about 0.29 per unit of risk. If you would invest 352.00 in Catalystsmh High Income on September 1, 2024 and sell it today you would earn a total of 25.00 from holding Catalystsmh High Income or generate 7.1% 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. High Yield Bond
Performance |
| Timeline |
| Catalystsmh High Income |
| High Yield Bond |
Catalyst/smh High and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/smh High and High Yield
The main advantage of trading using opposite Catalyst/smh High and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/smh High position performs unexpectedly, High Yield 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 will offset losses from the drop in High Yield's long position.| Catalyst/smh High vs. High Yield Bond | Catalyst/smh High vs. Artisan High Income | Catalyst/smh High vs. Pacific Funds High | Catalyst/smh High vs. Victory High Yield |
| High Yield vs. Manning Napier Callodine | High Yield vs. Manning Napier Callodine | High Yield vs. Manning Napier Callodine | High Yield vs. Pro Blend Extended Term |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |