Correlation Between Performance Trust and Core Plus
Can any of the company-specific risk be diversified away by investing in both Performance Trust and Core Plus 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 Performance Trust and Core Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performance Trust Strategic and Core Plus Income, you can compare the effects of market volatilities on Performance Trust and Core Plus 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 Performance Trust with a short position of Core Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Trust and Core Plus.
Diversification Opportunities for Performance Trust and Core Plus
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between PERFORMANCE and CORE is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Performance Trust Strategic and Core Plus Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Plus Income and Performance Trust 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 Performance Trust Strategic are associated (or correlated) with Core Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Plus Income has no effect on the direction of Performance Trust i.e., Performance Trust and Core Plus go up and down completely randomly.
Pair Corralation between Performance Trust and Core Plus
Assuming the 90 days horizon Performance Trust Strategic is expected to generate 0.97 times more return on investment than Core Plus. However, Performance Trust Strategic is 1.03 times less risky than Core Plus. It trades about 0.06 of its potential returns per unit of risk. Core Plus Income is currently generating about 0.06 per unit of risk. If you would invest 1,793 in Performance Trust Strategic on August 29, 2024 and sell it today you would earn a total of 201.00 from holding Performance Trust Strategic or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Trust Strategic vs. Core Plus Income
Performance |
| Timeline |
| Performance Trust |
| Core Plus Income |
Performance Trust and Core Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Trust and Core Plus
The main advantage of trading using opposite Performance Trust and Core Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Trust position performs unexpectedly, Core Plus 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 Core Plus will offset losses from the drop in Core Plus' long position.| Performance Trust vs. Pimco Income Fund | Performance Trust vs. HUMANA INC | Performance Trust vs. Aquagold International | Performance Trust vs. Barloworld Ltd ADR |
| Core Plus vs. Pimco Income Fund | Core Plus vs. HUMANA INC | Core Plus vs. Aquagold International | Core Plus vs. Barloworld Ltd ADR |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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