Correlation Between Floating Rate and Transamerica Floating
Can any of the company-specific risk be diversified away by investing in both Floating Rate and Transamerica Floating 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 Transamerica Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floating Rate Fund and Transamerica Floating Rate, you can compare the effects of market volatilities on Floating Rate and Transamerica Floating 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 Transamerica Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floating Rate and Transamerica Floating.
Diversification Opportunities for Floating Rate and Transamerica Floating
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Floating and Transamerica is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Floating Rate Fund and Transamerica Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Floating 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 Fund are associated (or correlated) with Transamerica Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Floating has no effect on the direction of Floating Rate i.e., Floating Rate and Transamerica Floating go up and down completely randomly.
Pair Corralation between Floating Rate and Transamerica Floating
Assuming the 90 days horizon Floating Rate Fund is expected to generate 1.05 times more return on investment than Transamerica Floating. However, Floating Rate is 1.05 times more volatile than Transamerica Floating Rate. It trades about 0.17 of its potential returns per unit of risk. Transamerica Floating Rate is currently generating about 0.18 per unit of risk. If you would invest 791.00 in Floating Rate Fund on September 3, 2024 and sell it today you would earn a total of 27.00 from holding Floating Rate Fund or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floating Rate Fund vs. Transamerica Floating Rate
Performance |
| Timeline |
| Floating Rate |
| Transamerica Floating |
Floating Rate and Transamerica Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floating Rate and Transamerica Floating
The main advantage of trading using opposite Floating Rate and Transamerica Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floating Rate position performs unexpectedly, Transamerica Floating 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 Transamerica Floating will offset losses from the drop in Transamerica Floating's long position.| Floating Rate vs. Eip Growth And | Floating Rate vs. T Rowe Price | Floating Rate vs. Pace Smallmedium Growth | Floating Rate vs. Artisan Small Cap |
| Transamerica Floating vs. Oppenheimer Senior Floating | Transamerica Floating vs. Oppenheimer Senior Floating | Transamerica Floating vs. Floating Rate Fund | Transamerica Floating vs. Floating Rate Fund |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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