Correlation Between City National and Highland Floating
Can any of the company-specific risk be diversified away by investing in both City National and Highland Floating 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 City National and Highland Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Highland Floating Rate, you can compare the effects of market volatilities on City National and Highland Floating 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 City National with a short position of Highland Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Highland Floating.
Diversification Opportunities for City National and Highland Floating
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between City and Highland is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Highland Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Floating Rate and City National 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 City National Rochdale are associated (or correlated) with Highland Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Floating Rate has no effect on the direction of City National i.e., City National and Highland Floating go up and down completely randomly.
Pair Corralation between City National and Highland Floating
Assuming the 90 days horizon City National is expected to generate 1.09 times less return on investment than Highland Floating. But when comparing it to its historical volatility, City National Rochdale is 4.34 times less risky than Highland Floating. It trades about 0.26 of its potential returns per unit of risk. Highland Floating Rate is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 738.00 in Highland Floating Rate on September 12, 2024 and sell it today you would earn a total of 97.00 from holding Highland Floating Rate or generate 13.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
City National Rochdale vs. Highland Floating Rate
Performance |
| Timeline |
| City National Rochdale |
| Highland Floating Rate |
City National and Highland Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Highland Floating
The main advantage of trading using opposite City National and Highland Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Highland Floating 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 Highland Floating will offset losses from the drop in Highland Floating's long position.| City National vs. Allianzgi Diversified Income | City National vs. Blackrock Conservative Prprdptfinstttnl | City National vs. Lord Abbett Diversified | City National vs. Wealthbuilder Conservative Allocation |
| Highland Floating vs. City National Rochdale | Highland Floating vs. Pace High Yield | Highland Floating vs. Artisan High Income | Highland Floating vs. Strategic Advisers Income |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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