Correlation Between Pax High and Hartford Checks
Can any of the company-specific risk be diversified away by investing in both Pax High and Hartford Checks 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 Pax High and Hartford Checks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pax High Yield and The Hartford Checks, you can compare the effects of market volatilities on Pax High and Hartford Checks 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 Pax High with a short position of Hartford Checks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pax High and Hartford Checks.
Diversification Opportunities for Pax High and Hartford Checks
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pax and Hartford is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pax High Yield and The Hartford Checks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Checks and Pax High 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 Pax High Yield are associated (or correlated) with Hartford Checks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Checks has no effect on the direction of Pax High i.e., Pax High and Hartford Checks go up and down completely randomly.
Pair Corralation between Pax High and Hartford Checks
Assuming the 90 days horizon Pax High Yield is expected to generate 0.34 times more return on investment than Hartford Checks. However, Pax High Yield is 2.9 times less risky than Hartford Checks. It trades about 0.28 of its potential returns per unit of risk. The Hartford Checks is currently generating about 0.06 per unit of risk. If you would invest 608.00 in Pax High Yield on September 15, 2024 and sell it today you would earn a total of 4.00 from holding Pax High Yield or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pax High Yield vs. The Hartford Checks
Performance |
| Timeline |
| Pax High Yield |
| Hartford Checks |
Pax High and Hartford Checks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pax High and Hartford Checks
The main advantage of trading using opposite Pax High and Hartford Checks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pax High position performs unexpectedly, Hartford Checks 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 Hartford Checks will offset losses from the drop in Hartford Checks' long position.| Pax High vs. Pax E Bond | Pax High vs. Pax Global Environmental | Pax High vs. Pax Esg Beta | Pax High vs. Pax Global Opportunities |
| Hartford Checks vs. Janus High Yield Fund | Hartford Checks vs. Pax High Yield | Hartford Checks vs. City National Rochdale | Hartford Checks vs. Voya High Yield |
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 Positions Ratings module to 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.
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