Correlation Between High Yield and Global Fixed
Can any of the company-specific risk be diversified away by investing in both High Yield and Global Fixed 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 High Yield and Global Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Portfolio and Global Fixed Income, you can compare the effects of market volatilities on High Yield and Global Fixed 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 High Yield with a short position of Global Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Global Fixed.
Diversification Opportunities for High Yield and Global Fixed
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between High and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Portfolio and Global Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Fixed Income and High Yield 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 High Yield Portfolio are associated (or correlated) with Global Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Fixed Income has no effect on the direction of High Yield i.e., High Yield and Global Fixed go up and down completely randomly.
Pair Corralation between High Yield and Global Fixed
If you would invest 828.00 in High Yield Portfolio on October 7, 2024 and sell it today you would earn a total of 24.00 from holding High Yield Portfolio or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
High Yield Portfolio vs. Global Fixed Income
Performance |
| Timeline |
| High Yield Portfolio |
| Global Fixed Income |
High Yield and Global Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Global Fixed
The main advantage of trading using opposite High Yield and Global Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, Global Fixed 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 Global Fixed will offset losses from the drop in Global Fixed's long position.| High Yield vs. Aqr Large Cap | High Yield vs. Old Westbury Large | High Yield vs. Rbb Fund Trust | High Yield vs. Rational Strategic Allocation |
| Global Fixed vs. Stone Ridge Diversified | Global Fixed vs. Delaware Limited Term Diversified | Global Fixed vs. Tax Free Conservative Income | Global Fixed vs. Guggenheim Diversified Income |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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