Correlation Between Floating Rate and Huber Capital
Can any of the company-specific risk be diversified away by investing in both Floating Rate and Huber Capital 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 Floating Rate and Huber Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floating Rate Income and Huber Capital Equity, you can compare the effects of market volatilities on Floating Rate and Huber Capital 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 Floating Rate with a short position of Huber Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floating Rate and Huber Capital.
Diversification Opportunities for Floating Rate and Huber Capital
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Floating and Huber is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Floating Rate Income and Huber Capital Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huber Capital Equity and Floating Rate 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 Floating Rate Income are associated (or correlated) with Huber Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huber Capital Equity has no effect on the direction of Floating Rate i.e., Floating Rate and Huber Capital go up and down completely randomly.
Pair Corralation between Floating Rate and Huber Capital
Assuming the 90 days horizon Floating Rate Income is expected to generate 0.07 times more return on investment than Huber Capital. However, Floating Rate Income is 13.58 times less risky than Huber Capital. It trades about 0.39 of its potential returns per unit of risk. Huber Capital Equity is currently generating about -0.06 per unit of risk. 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 |
Floating Rate Income vs. Huber Capital Equity
Performance |
| Timeline |
| Floating Rate Income |
| Huber Capital Equity |
Floating Rate and Huber Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floating Rate and Huber Capital
The main advantage of trading using opposite Floating Rate and Huber Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floating Rate position performs unexpectedly, Huber Capital 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 Huber Capital will offset losses from the drop in Huber Capital's long position.| Floating Rate vs. Regional Bank Fund | Floating Rate vs. Regional Bank Fund | Floating Rate vs. Multimanager Lifestyle Moderate | Floating Rate vs. Multimanager Lifestyle Balanced |
| Huber Capital vs. Huber Capital Equity | Huber Capital vs. Huber Capital Small | Huber Capital vs. Huber Capital Small | Huber Capital vs. Amg Gwk Small |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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