Correlation Between Pace High and Growth Income
Can any of the company-specific risk be diversified away by investing in both Pace High and Growth Income 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 Growth Income 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 Growth Income Fund, you can compare the effects of market volatilities on Pace High and Growth Income 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 Growth Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace High and Growth Income.
Diversification Opportunities for Pace High and Growth Income
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PACE and Growth is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Pace High Yield and Growth Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Income 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 Growth Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Income has no effect on the direction of Pace High i.e., Pace High and Growth Income go up and down completely randomly.
Pair Corralation between Pace High and Growth Income
Assuming the 90 days horizon Pace High is expected to generate 7.29 times less return on investment than Growth Income. But when comparing it to its historical volatility, Pace High Yield is 7.42 times less risky than Growth Income. It trades about 0.18 of its potential returns per unit of risk. Growth Income Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,333 in Growth Income Fund on August 24, 2024 and sell it today you would earn a total of 115.00 from holding Growth Income Fund or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pace High Yield vs. Growth Income Fund
Performance |
| Timeline |
| Pace High Yield |
| Growth Income |
Pace High and Growth Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace High and Growth Income
The main advantage of trading using opposite Pace High and Growth Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace High position performs unexpectedly, Growth Income 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 Growth Income will offset losses from the drop in Growth Income's long position.| Pace High vs. Prudential High Yield | Pace High vs. Parametric Modity Strategy | Pace High vs. HUMANA INC | Pace High vs. Aquagold International |
| Growth Income vs. Pace High Yield | Growth Income vs. Ab Global Risk | Growth Income vs. Western Asset High | Growth Income vs. Siit High Yield |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |