Correlation Between Huber Capital and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Huber Capital and Floating Rate 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 Huber Capital and Floating Rate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huber Capital Equity and Floating Rate Income, you can compare the effects of market volatilities on Huber Capital and Floating Rate 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 Huber Capital with a short position of Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huber Capital and Floating Rate.
Diversification Opportunities for Huber Capital and Floating Rate
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huber and Floating is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Huber Capital Equity and Floating Rate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate Income and Huber Capital 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 Huber Capital Equity are associated (or correlated) with Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate Income has no effect on the direction of Huber Capital i.e., Huber Capital and Floating Rate go up and down completely randomly.
Pair Corralation between Huber Capital and Floating Rate
Assuming the 90 days horizon Huber Capital Equity is expected to under-perform the Floating Rate. In addition to that, Huber Capital is 13.58 times more volatile than Floating Rate Income. It trades about -0.06 of its total potential returns per unit of risk. Floating Rate Income is currently generating about 0.39 per unit of volatility. If you would invest 767.00 in Floating Rate Income on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Floating Rate Income or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Huber Capital Equity vs. Floating Rate Income
Performance |
| Timeline |
| Huber Capital Equity |
| Floating Rate Income |
Huber Capital and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huber Capital and Floating Rate
The main advantage of trading using opposite Huber Capital and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huber Capital position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.| Huber Capital vs. Huber Capital Equity | Huber Capital vs. Huber Capital Small | Huber Capital vs. Huber Capital Small | Huber Capital vs. Amg Gwk Small |
| Floating Rate vs. Regional Bank Fund | Floating Rate vs. Regional Bank Fund | Floating Rate vs. Multimanager Lifestyle Moderate | Floating Rate vs. Multimanager Lifestyle Balanced |
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.
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