Correlation Between Pace High and City National
Can any of the company-specific risk be diversified away by investing in both Pace High and City National 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 Pace High and City National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace High Yield and City National Rochdale, you can compare the effects of market volatilities on Pace High and City National 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 Pace High with a short position of City National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace High and City National.
Diversification Opportunities for Pace High and City National
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pace and City is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Pace High Yield and City National Rochdale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City National Rochdale and Pace 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 Pace High Yield are associated (or correlated) with City National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City National Rochdale has no effect on the direction of Pace High i.e., Pace High and City National go up and down completely randomly.
Pair Corralation between Pace High and City National
If you would invest 895.00 in Pace High Yield on September 13, 2024 and sell it today you would earn a total of 8.00 from holding Pace High Yield or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace High Yield vs. City National Rochdale
Performance |
| Timeline |
| Pace High Yield |
| City National Rochdale |
Pace High and City National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace High and City National
The main advantage of trading using opposite Pace High and City National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace High position performs unexpectedly, City National 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 City National will offset losses from the drop in City National's long position.| Pace High vs. Pace Smallmedium Value | Pace High vs. Pace International Equity | Pace High vs. Pace International Equity | Pace High vs. Ubs Allocation Fund |
| City National vs. Ishares Municipal Bond | City National vs. T Rowe Price | City National vs. Pace High Yield | City National vs. Morningstar Defensive Bond |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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