Correlation Between High Yield and Us Global
Can any of the company-specific risk be diversified away by investing in both High Yield and Us Global 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 High Yield and Us Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Fund and Us Global Investors, you can compare the effects of market volatilities on High Yield and Us Global 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 High Yield with a short position of Us Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Us Global.
Diversification Opportunities for High Yield and Us Global
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HIGH and USLUX is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Fund and Us Global Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Global Investors and High Yield 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 High Yield Fund are associated (or correlated) with Us Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Global Investors has no effect on the direction of High Yield i.e., High Yield and Us Global go up and down completely randomly.
Pair Corralation between High Yield and Us Global
Assuming the 90 days horizon High Yield Fund is expected to generate 0.2 times more return on investment than Us Global. However, High Yield Fund is 5.12 times less risky than Us Global. It trades about 0.15 of its potential returns per unit of risk. Us Global Investors is currently generating about -0.04 per unit of risk. If you would invest 672.00 in High Yield Fund on November 28, 2024 and sell it today you would earn a total of 4.00 from holding High Yield Fund or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Fund vs. Us Global Investors
Performance |
| Timeline |
| High Yield Fund |
| Us Global Investors |
High Yield and Us Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Us Global
The main advantage of trading using opposite High Yield and Us Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, Us Global 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 Us Global will offset losses from the drop in Us Global's long position.| High Yield vs. Profunds Large Cap Growth | High Yield vs. American Mutual Fund | High Yield vs. Tax Managed Large Cap | High Yield vs. M Large Cap |
| Us Global vs. Vanguard Reit Index | Us Global vs. Redwood Real Estate | Us Global vs. Real Estate Ultrasector | Us Global vs. Cohen Steers Real |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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