Correlation Between Pace High and Manning Napier
Can any of the company-specific risk be diversified away by investing in both Pace High and Manning Napier 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 Manning Napier 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 Manning Napier Core, you can compare the effects of market volatilities on Pace High and Manning Napier 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 Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace High and Manning Napier.
Diversification Opportunities for Pace High and Manning Napier
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PACE and Manning is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Pace High Yield and Manning Napier Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Core 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 Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier Core has no effect on the direction of Pace High i.e., Pace High and Manning Napier go up and down completely randomly.
Pair Corralation between Pace High and Manning Napier
Assuming the 90 days horizon Pace High is expected to generate 1.54 times less return on investment than Manning Napier. But when comparing it to its historical volatility, Pace High Yield is 2.41 times less risky than Manning Napier. It trades about 0.07 of its potential returns per unit of risk. Manning Napier Core is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 923.00 in Manning Napier Core on August 30, 2024 and sell it today you would earn a total of 3.00 from holding Manning Napier Core or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pace High Yield vs. Manning Napier Core
Performance |
| Timeline |
| Pace High Yield |
| Manning Napier Core |
Pace High and Manning Napier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace High and Manning Napier
The main advantage of trading using opposite Pace High and Manning Napier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace High position performs unexpectedly, Manning Napier 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 Manning Napier will offset losses from the drop in Manning Napier's long position.| Pace High vs. Hennessy Nerstone Mid | Pace High vs. Queens Road Small | Pace High vs. Ab Discovery Value | Pace High vs. Vanguard Small Cap Value |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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