Correlation Between Principal Spectrum and Managed Account
Can any of the company-specific risk be diversified away by investing in both Principal Spectrum and Managed Account 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 Principal Spectrum and Managed Account into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Principal Spectrum Preferred and Managed Account Series, you can compare the effects of market volatilities on Principal Spectrum and Managed Account 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 Principal Spectrum with a short position of Managed Account. Check out your portfolio center. Please also check ongoing floating volatility patterns of Principal Spectrum and Managed Account.
Diversification Opportunities for Principal Spectrum and Managed Account
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Principal and Managed is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Principal Spectrum Preferred and Managed Account Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Managed Account Series and Principal Spectrum 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 Principal Spectrum Preferred are associated (or correlated) with Managed Account. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Managed Account Series has no effect on the direction of Principal Spectrum i.e., Principal Spectrum and Managed Account go up and down completely randomly.
Pair Corralation between Principal Spectrum and Managed Account
Given the investment horizon of 90 days Principal Spectrum is expected to generate 3.62 times less return on investment than Managed Account. But when comparing it to its historical volatility, Principal Spectrum Preferred is 1.18 times less risky than Managed Account. It trades about 0.05 of its potential returns per unit of risk. Managed Account Series is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 890.00 in Managed Account Series on August 28, 2024 and sell it today you would earn a total of 7.00 from holding Managed Account Series or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Principal Spectrum Preferred vs. Managed Account Series
Performance |
| Timeline |
| Principal Spectrum |
| Managed Account Series |
Principal Spectrum and Managed Account Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Principal Spectrum and Managed Account
The main advantage of trading using opposite Principal Spectrum and Managed Account positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Principal Spectrum position performs unexpectedly, Managed Account 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 Managed Account will offset losses from the drop in Managed Account's long position.| Principal Spectrum vs. Managed Account Series | Principal Spectrum vs. Fidelity Sai International | Principal Spectrum vs. Schwab Strategic Trust | Principal Spectrum vs. Prairie Provident Resources |
| Managed Account vs. Virtus Real Estate | Managed Account vs. Simt Real Estate | Managed Account vs. Fidelity Real Estate | Managed Account vs. Amg Managers Centersquare |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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