Correlation Between Ppm High and Summit Global
Can any of the company-specific risk be diversified away by investing in both Ppm High and Summit 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 Ppm High and Summit Global 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 Summit Global Investments, you can compare the effects of market volatilities on Ppm High and Summit 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 Ppm High with a short position of Summit Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ppm High and Summit Global.
Diversification Opportunities for Ppm High and Summit Global
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ppm and Summit is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ppm High Yield and Summit Global Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Global Investments 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 Summit Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Global Investments has no effect on the direction of Ppm High i.e., Ppm High and Summit Global go up and down completely randomly.
Pair Corralation between Ppm High and Summit Global
Assuming the 90 days horizon Ppm High is expected to generate 1.53 times less return on investment than Summit Global. But when comparing it to its historical volatility, Ppm High Yield is 2.36 times less risky than Summit Global. It trades about 0.23 of its potential returns per unit of risk. Summit Global Investments is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,311 in Summit Global Investments on September 4, 2024 and sell it today you would earn a total of 733.00 from holding Summit Global Investments or generate 22.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Ppm High Yield vs. Summit Global Investments
Performance |
| Timeline |
| Ppm High Yield |
| Summit Global Investments |
Ppm High and Summit Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ppm High and Summit Global
The main advantage of trading using opposite Ppm High and Summit Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ppm High position performs unexpectedly, Summit 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 Summit Global will offset losses from the drop in Summit Global's long position.| Ppm High vs. Ppm Core Plus | Ppm High vs. Fidelity Advisor Industrials | Ppm High vs. Blackrock Resources Commodities | Ppm High vs. Small Cap Equity |
| Summit Global vs. Artisan Emerging Markets | Summit Global vs. Western Assets Emerging | Summit Global vs. Templeton Developing Markets | Summit Global vs. Locorr Market Trend |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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