Correlation Between LifeMD Preferred and High-yield Municipal
Can any of the company-specific risk be diversified away by investing in both LifeMD Preferred and High-yield Municipal 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 LifeMD Preferred and High-yield Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LifeMD Preferred Series and High Yield Municipal Fund, you can compare the effects of market volatilities on LifeMD Preferred and High-yield Municipal 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 LifeMD Preferred with a short position of High-yield Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of LifeMD Preferred and High-yield Municipal.
Diversification Opportunities for LifeMD Preferred and High-yield Municipal
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LifeMD and High-yield is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding LifeMD Preferred Series and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal and LifeMD Preferred 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 LifeMD Preferred Series are associated (or correlated) with High-yield Municipal. 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 Municipal has no effect on the direction of LifeMD Preferred i.e., LifeMD Preferred and High-yield Municipal go up and down completely randomly.
Pair Corralation between LifeMD Preferred and High-yield Municipal
Assuming the 90 days horizon LifeMD Preferred Series is expected to generate 4.33 times more return on investment than High-yield Municipal. However, LifeMD Preferred is 4.33 times more volatile than High Yield Municipal Fund. It trades about 0.07 of its potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.16 per unit of risk. If you would invest 2,214 in LifeMD Preferred Series on August 30, 2024 and sell it today you would earn a total of 56.00 from holding LifeMD Preferred Series or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LifeMD Preferred Series vs. High Yield Municipal Fund
Performance |
| Timeline |
| LifeMD Preferred Series |
| High Yield Municipal |
LifeMD Preferred and High-yield Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LifeMD Preferred and High-yield Municipal
The main advantage of trading using opposite LifeMD Preferred and High-yield Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LifeMD Preferred position performs unexpectedly, High-yield Municipal 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 Municipal will offset losses from the drop in High-yield Municipal's long position.| LifeMD Preferred vs. Cadiz Depositary Shares | LifeMD Preferred vs. Star Equity Holdings | LifeMD Preferred vs. FAT Brands | LifeMD Preferred vs. Fortress Biotech Pref |
| High-yield Municipal vs. High Yield Fund Investor | High-yield Municipal vs. Intermediate Term Tax Free Bond | High-yield Municipal vs. California High Yield Municipal | High-yield Municipal vs. T Rowe Price |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |