Correlation Between Pax High and Pear Tree
Can any of the company-specific risk be diversified away by investing in both Pax High and Pear Tree 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 Pax High and Pear Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pax High Yield and Pear Tree Polaris, you can compare the effects of market volatilities on Pax High and Pear Tree 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 Pax High with a short position of Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pax High and Pear Tree.
Diversification Opportunities for Pax High and Pear Tree
Pay attention - limited upside
The 3 months correlation between Pax and Pear is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pax High Yield and Pear Tree Polaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Polaris and Pax High 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 Pax High Yield are associated (or correlated) with Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Polaris has no effect on the direction of Pax High i.e., Pax High and Pear Tree go up and down completely randomly.
Pair Corralation between Pax High and Pear Tree
Assuming the 90 days horizon Pax High Yield is expected to generate 0.21 times more return on investment than Pear Tree. However, Pax High Yield is 4.77 times less risky than Pear Tree. It trades about 0.12 of its potential returns per unit of risk. Pear Tree Polaris is currently generating about -0.05 per unit of risk. If you would invest 605.00 in Pax High Yield on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Pax High Yield or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pax High Yield vs. Pear Tree Polaris
Performance |
| Timeline |
| Pax High Yield |
| Pear Tree Polaris |
Pax High and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pax High and Pear Tree
The main advantage of trading using opposite Pax High and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pax High position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree's long position.| Pax High vs. Vanguard High Yield Corporate | Pax High vs. Vanguard High Yield Porate | Pax High vs. Blackrock Hi Yld | Pax High vs. Blackrock High Yield |
| Pear Tree vs. Wasatch E Growth | Pear Tree vs. Tcw E Fixed | Pear Tree vs. Tcw Relative Value | Pear Tree vs. Amg Managers Loomis |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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