Correlation Between Flexible Bond and Henderson Strategic
Can any of the company-specific risk be diversified away by investing in both Flexible Bond and Henderson Strategic 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 Flexible Bond and Henderson Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Bond Portfolio and Henderson Strategic Income, you can compare the effects of market volatilities on Flexible Bond and Henderson Strategic 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 Flexible Bond with a short position of Henderson Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Bond and Henderson Strategic.
Diversification Opportunities for Flexible Bond and Henderson Strategic
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Flexible and Henderson is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Bond Portfolio and Henderson Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson Strategic and Flexible Bond 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 Flexible Bond Portfolio are associated (or correlated) with Henderson Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson Strategic has no effect on the direction of Flexible Bond i.e., Flexible Bond and Henderson Strategic go up and down completely randomly.
Pair Corralation between Flexible Bond and Henderson Strategic
Assuming the 90 days horizon Flexible Bond Portfolio is expected to generate 1.03 times more return on investment than Henderson Strategic. However, Flexible Bond is 1.03 times more volatile than Henderson Strategic Income. It trades about 0.06 of its potential returns per unit of risk. Henderson Strategic Income is currently generating about 0.05 per unit of risk. If you would invest 952.00 in Flexible Bond Portfolio on December 2, 2024 and sell it today you would earn a total of 51.00 from holding Flexible Bond Portfolio or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Bond Portfolio vs. Henderson Strategic Income
Performance |
| Timeline |
| Flexible Bond Portfolio |
| Henderson Strategic |
Flexible Bond and Henderson Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Bond and Henderson Strategic
The main advantage of trading using opposite Flexible Bond and Henderson Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Bond position performs unexpectedly, Henderson Strategic 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 Henderson Strategic will offset losses from the drop in Henderson Strategic's long position.| Flexible Bond vs. Goldman Sachs High | Flexible Bond vs. Aqr Risk Parity | Flexible Bond vs. Aqr Alternative Risk | Flexible Bond vs. Artisan High Income |
| Henderson Strategic vs. Henderson European Focus | Henderson Strategic vs. Henderson Global Equity | Henderson Strategic vs. Janus Balanced Fund | Henderson Strategic vs. Prudential Global Total |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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