Correlation Between City National and Inverse High
Can any of the company-specific risk be diversified away by investing in both City National and Inverse High 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 Inverse High 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 Inverse High Yield, you can compare the effects of market volatilities on City National and Inverse High 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 Inverse High. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Inverse High.
Diversification Opportunities for City National and Inverse High
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between City and Inverse is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Inverse High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse High Yield 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 Inverse High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse High Yield has no effect on the direction of City National i.e., City National and Inverse High go up and down completely randomly.
Pair Corralation between City National and Inverse High
Assuming the 90 days horizon City National Rochdale is expected to generate 0.34 times more return on investment than Inverse High. However, City National Rochdale is 2.97 times less risky than Inverse High. It trades about 0.25 of its potential returns per unit of risk. Inverse High Yield is currently generating about -0.02 per unit of risk. If you would invest 1,657 in City National Rochdale on September 19, 2024 and sell it today you would earn a total of 323.00 from holding City National Rochdale or generate 19.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
City National Rochdale vs. Inverse High Yield
Performance |
| Timeline |
| City National Rochdale |
| Inverse High Yield |
City National and Inverse High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Inverse High
The main advantage of trading using opposite City National and Inverse High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Inverse High 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 Inverse High will offset losses from the drop in Inverse High's long position.| City National vs. American Funds Inflation | City National vs. Altegris Futures Evolution | City National vs. Deutsche Global Inflation | City National vs. Guidepath Managed Futures |
| Inverse High vs. Basic Materials Fund | Inverse High vs. Basic Materials Fund | Inverse High vs. Banking Fund Class | Inverse High vs. Basic Materials Fund |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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