Correlation Between Northeast Investors and High-yield Fund
Can any of the company-specific risk be diversified away by investing in both Northeast Investors and High-yield Fund 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 Northeast Investors and High-yield Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northeast Investors Trust and High Yield Fund Investor, you can compare the effects of market volatilities on Northeast Investors and High-yield Fund 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 Northeast Investors with a short position of High-yield Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northeast Investors and High-yield Fund.
Diversification Opportunities for Northeast Investors and High-yield Fund
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Northeast and High-yield is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Northeast Investors Trust and High Yield Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund and Northeast Investors 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 Northeast Investors Trust are associated (or correlated) with High-yield Fund. 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 Fund has no effect on the direction of Northeast Investors i.e., Northeast Investors and High-yield Fund go up and down completely randomly.
Pair Corralation between Northeast Investors and High-yield Fund
Assuming the 90 days horizon Northeast Investors Trust is expected to generate 1.02 times more return on investment than High-yield Fund. However, Northeast Investors is 1.02 times more volatile than High Yield Fund Investor. It trades about 0.11 of its potential returns per unit of risk. High Yield Fund Investor is currently generating about 0.1 per unit of risk. If you would invest 312.00 in Northeast Investors Trust on August 30, 2024 and sell it today you would earn a total of 56.00 from holding Northeast Investors Trust or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northeast Investors Trust vs. High Yield Fund Investor
Performance |
| Timeline |
| Northeast Investors Trust |
| High Yield Fund |
Northeast Investors and High-yield Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northeast Investors and High-yield Fund
The main advantage of trading using opposite Northeast Investors and High-yield Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northeast Investors position performs unexpectedly, High-yield Fund 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 Fund will offset losses from the drop in High-yield Fund's long position.| Northeast Investors vs. Delaware Limited Term Diversified | Northeast Investors vs. Jhancock Diversified Macro | Northeast Investors vs. Blackrock Sm Cap | Northeast Investors vs. Small Cap Stock |
| High-yield Fund vs. Prudential High Yield | High-yield Fund vs. HUMANA INC | High-yield Fund vs. Aquagold International | High-yield Fund vs. Barloworld Ltd ADR |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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