Correlation Between Palmer Square and Absolute Convertible
Can any of the company-specific risk be diversified away by investing in both Palmer Square and Absolute Convertible 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 Palmer Square and Absolute Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palmer Square Ssi and Absolute Convertible Arbitrage, you can compare the effects of market volatilities on Palmer Square and Absolute Convertible 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 Palmer Square with a short position of Absolute Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palmer Square and Absolute Convertible.
Diversification Opportunities for Palmer Square and Absolute Convertible
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Palmer and Absolute is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Palmer Square Ssi and Absolute Convertible Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Convertible and Palmer Square 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 Palmer Square Ssi are associated (or correlated) with Absolute Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Convertible has no effect on the direction of Palmer Square i.e., Palmer Square and Absolute Convertible go up and down completely randomly.
Pair Corralation between Palmer Square and Absolute Convertible
Assuming the 90 days horizon Palmer Square Ssi is expected to generate 0.93 times more return on investment than Absolute Convertible. However, Palmer Square Ssi is 1.07 times less risky than Absolute Convertible. It trades about 0.32 of its potential returns per unit of risk. Absolute Convertible Arbitrage is currently generating about 0.19 per unit of risk. If you would invest 849.00 in Palmer Square Ssi on September 2, 2024 and sell it today you would earn a total of 151.00 from holding Palmer Square Ssi or generate 17.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palmer Square Ssi vs. Absolute Convertible Arbitrage
Performance |
| Timeline |
| Palmer Square Ssi |
| Absolute Convertible |
Palmer Square and Absolute Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palmer Square and Absolute Convertible
The main advantage of trading using opposite Palmer Square and Absolute Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palmer Square position performs unexpectedly, Absolute Convertible 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 Absolute Convertible will offset losses from the drop in Absolute Convertible's long position.| Palmer Square vs. Pimco Short Asset | Palmer Square vs. Doubleline Low Duration | Palmer Square vs. Dfa One Year Fixed | Palmer Square vs. Short Term Income Fund |
| Absolute Convertible vs. Angel Oak Multi Strategy | Absolute Convertible vs. Transamerica Emerging Markets | Absolute Convertible vs. Black Oak Emerging | Absolute Convertible vs. Barings Emerging Markets |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |