Correlation Between Palmer Square and Short-term Income
Can any of the company-specific risk be diversified away by investing in both Palmer Square and Short-term Income 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 Short-term Income 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 Short Term Income Fund, you can compare the effects of market volatilities on Palmer Square and Short-term Income 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 Short-term Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palmer Square and Short-term Income.
Diversification Opportunities for Palmer Square and Short-term Income
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Palmer and Short-term is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Palmer Square Ssi and Short Term Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Income 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 Short-term Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Income has no effect on the direction of Palmer Square i.e., Palmer Square and Short-term Income go up and down completely randomly.
Pair Corralation between Palmer Square and Short-term Income
Assuming the 90 days horizon Palmer Square Ssi is expected to generate 1.19 times more return on investment than Short-term Income. However, Palmer Square is 1.19 times more volatile than Short Term Income Fund. It trades about 0.29 of its potential returns per unit of risk. Short Term Income Fund is currently generating about 0.14 per unit of risk. If you would invest 991.00 in Palmer Square Ssi on September 5, 2024 and sell it today you would earn a total of 6.00 from holding Palmer Square Ssi or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palmer Square Ssi vs. Short Term Income Fund
Performance |
| Timeline |
| Palmer Square Ssi |
| Short Term Income |
Palmer Square and Short-term Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palmer Square and Short-term Income
The main advantage of trading using opposite Palmer Square and Short-term Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palmer Square position performs unexpectedly, Short-term Income 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 Short-term Income will offset losses from the drop in Short-term Income'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 |
| Short-term Income vs. Prudential Government Money | Short-term Income vs. First American Funds | Short-term Income vs. Transamerica Funds | Short-term Income vs. General Money Market |
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.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |