Correlation Between Pace High and American Funds
Can any of the company-specific risk be diversified away by investing in both Pace High and American Funds 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 American Funds 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 American Funds Preservation, you can compare the effects of market volatilities on Pace High and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace High and American Funds.
Diversification Opportunities for Pace High and American Funds
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pace and American is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Pace High Yield and American Funds Preservation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Prese 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Prese has no effect on the direction of Pace High i.e., Pace High and American Funds go up and down completely randomly.
Pair Corralation between Pace High and American Funds
Assuming the 90 days horizon Pace High Yield is expected to generate 0.79 times more return on investment than American Funds. However, Pace High Yield is 1.26 times less risky than American Funds. It trades about 0.29 of its potential returns per unit of risk. American Funds Preservation is currently generating about 0.04 per unit of risk. If you would invest 891.00 in Pace High Yield on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Pace High Yield or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace High Yield vs. American Funds Preservation
Performance |
| Timeline |
| Pace High Yield |
| American Funds Prese |
Pace High and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace High and American Funds
The main advantage of trading using opposite Pace High and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace High position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' 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 |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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