Correlation Between Pace High and Highland Floating
Can any of the company-specific risk be diversified away by investing in both Pace High and Highland Floating 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 Highland Floating 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 Highland Floating Rate, you can compare the effects of market volatilities on Pace High and Highland Floating 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 Highland Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace High and Highland Floating.
Diversification Opportunities for Pace High and Highland Floating
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pace and Highland is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pace High Yield and Highland Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Floating Rate 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 Highland Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Floating Rate has no effect on the direction of Pace High i.e., Pace High and Highland Floating go up and down completely randomly.
Pair Corralation between Pace High and Highland Floating
Assuming the 90 days horizon Pace High Yield is expected to generate 0.35 times more return on investment than Highland Floating. However, Pace High Yield is 2.89 times less risky than Highland Floating. It trades about 0.22 of its potential returns per unit of risk. Highland Floating Rate is currently generating about 0.06 per unit of risk. If you would invest 776.00 in Pace High Yield on September 12, 2024 and sell it today you would earn a total of 126.00 from holding Pace High Yield or generate 16.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Pace High Yield vs. Highland Floating Rate
Performance |
| Timeline |
| Pace High Yield |
| Highland Floating Rate |
Pace High and Highland Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace High and Highland Floating
The main advantage of trading using opposite Pace High and Highland Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace High position performs unexpectedly, Highland Floating 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 Highland Floating will offset losses from the drop in Highland Floating's long position.| Pace High vs. SCOR PK | Pace High vs. Morningstar Unconstrained Allocation | Pace High vs. Via Renewables | Pace High vs. Bondbloxx ETF Trust |
| Highland Floating vs. City National Rochdale | Highland Floating vs. Pace High Yield | Highland Floating vs. Artisan High Income | Highland Floating vs. Strategic Advisers 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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