Correlation Between Mirova Global and California High-yield
Can any of the company-specific risk be diversified away by investing in both Mirova Global and California High-yield 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 Mirova Global and California High-yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mirova Global Green and California High Yield Municipal, you can compare the effects of market volatilities on Mirova Global and California High-yield 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 Mirova Global with a short position of California High-yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirova Global and California High-yield.
Diversification Opportunities for Mirova Global and California High-yield
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mirova and California is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mirova Global Green and California High Yield Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California High Yield and Mirova Global 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 Mirova Global Green are associated (or correlated) with California High-yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California High Yield has no effect on the direction of Mirova Global i.e., Mirova Global and California High-yield go up and down completely randomly.
Pair Corralation between Mirova Global and California High-yield
Assuming the 90 days horizon Mirova Global Green is expected to generate 1.19 times more return on investment than California High-yield. However, Mirova Global is 1.19 times more volatile than California High Yield Municipal. It trades about 0.09 of its potential returns per unit of risk. California High Yield Municipal is currently generating about 0.09 per unit of risk. If you would invest 838.00 in Mirova Global Green on August 25, 2024 and sell it today you would earn a total of 38.00 from holding Mirova Global Green or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirova Global Green vs. California High Yield Municipa
Performance |
| Timeline |
| Mirova Global Green |
| California High Yield |
Mirova Global and California High-yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirova Global and California High-yield
The main advantage of trading using opposite Mirova Global and California High-yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirova Global position performs unexpectedly, California High-yield 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 California High-yield will offset losses from the drop in California High-yield's long position.| Mirova Global vs. VanEck Green Bond | Mirova Global vs. Calvert Green Bond | Mirova Global vs. Tiaa Cref Social Choice | Mirova Global vs. Asg Managed Futures |
| California High-yield vs. Kinetics Spin Off And | California High-yield vs. Chartwell Short Duration | California High-yield vs. Victory High Income | California High-yield vs. Mirova Global Green |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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