Correlation Between Palmer Square and City National
Can any of the company-specific risk be diversified away by investing in both Palmer Square and City National 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 City National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palmer Square Ultra Short and City National Rochdale, you can compare the effects of market volatilities on Palmer Square and City National 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 City National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palmer Square and City National.
Diversification Opportunities for Palmer Square and City National
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Palmer and City is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Palmer Square Ultra Short and City National Rochdale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City National Rochdale 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 Ultra Short are associated (or correlated) with City National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City National Rochdale has no effect on the direction of Palmer Square i.e., Palmer Square and City National go up and down completely randomly.
Pair Corralation between Palmer Square and City National
Assuming the 90 days horizon Palmer Square Ultra Short is expected to generate 0.02 times more return on investment than City National. However, Palmer Square Ultra Short is 43.79 times less risky than City National. It trades about 0.77 of its potential returns per unit of risk. City National Rochdale is currently generating about 0.01 per unit of risk. If you would invest 1,892 in Palmer Square Ultra Short on November 3, 2024 and sell it today you would earn a total of 105.00 from holding Palmer Square Ultra Short or generate 5.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palmer Square Ultra Short vs. City National Rochdale
Performance |
| Timeline |
| Palmer Square Ultra |
| City National Rochdale |
Palmer Square and City National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palmer Square and City National
The main advantage of trading using opposite Palmer Square and City National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palmer Square position performs unexpectedly, City National 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 City National will offset losses from the drop in City National's long position.| Palmer Square vs. Gmo International Equity | Palmer Square vs. Transamerica International Equity | Palmer Square vs. Old Westbury Fixed | Palmer Square vs. Aqr Long Short Equity |
| City National vs. Ab Bond Inflation | City National vs. Touchstone Ultra Short | City National vs. Artisan High Income | City National vs. Rbc Bluebay Emerging |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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