Correlation Between Ppm High and Ing Intermediate
Can any of the company-specific risk be diversified away by investing in both Ppm High and Ing Intermediate 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 Ppm High and Ing Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ppm High Yield and Ing Intermediate Bond, you can compare the effects of market volatilities on Ppm High and Ing Intermediate 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 Ppm High with a short position of Ing Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ppm High and Ing Intermediate.
Diversification Opportunities for Ppm High and Ing Intermediate
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ppm and Ing is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ppm High Yield and Ing Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ing Intermediate Bond and Ppm 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 Ppm High Yield are associated (or correlated) with Ing Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ing Intermediate Bond has no effect on the direction of Ppm High i.e., Ppm High and Ing Intermediate go up and down completely randomly.
Pair Corralation between Ppm High and Ing Intermediate
Assuming the 90 days horizon Ppm High Yield is expected to generate 0.68 times more return on investment than Ing Intermediate. However, Ppm High Yield is 1.47 times less risky than Ing Intermediate. It trades about 0.16 of its potential returns per unit of risk. Ing Intermediate Bond is currently generating about 0.06 per unit of risk. If you would invest 771.00 in Ppm High Yield on September 2, 2024 and sell it today you would earn a total of 128.00 from holding Ppm High Yield or generate 16.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ppm High Yield vs. Ing Intermediate Bond
Performance |
| Timeline |
| Ppm High Yield |
| Ing Intermediate Bond |
Ppm High and Ing Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ppm High and Ing Intermediate
The main advantage of trading using opposite Ppm High and Ing Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ppm High position performs unexpectedly, Ing Intermediate 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 Ing Intermediate will offset losses from the drop in Ing Intermediate's long position.| Ppm High vs. Clearbridge Energy Mlp | Ppm High vs. Alpsalerian Energy Infrastructure | Ppm High vs. Gamco Natural Resources | Ppm High vs. Firsthand Alternative Energy |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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