Correlation Between Commodities Strategy and American High-income
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy and American High-income 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 Commodities Strategy and American High-income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and American High Income Municipal, you can compare the effects of market volatilities on Commodities Strategy and American High-income 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 Commodities Strategy with a short position of American High-income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and American High-income.
Diversification Opportunities for Commodities Strategy and American High-income
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commodities and American is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and American High Income Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American High Income and Commodities Strategy 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 Commodities Strategy Fund are associated (or correlated) with American High-income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American High Income has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and American High-income go up and down completely randomly.
Pair Corralation between Commodities Strategy and American High-income
Assuming the 90 days horizon Commodities Strategy Fund is expected to generate 3.98 times more return on investment than American High-income. However, Commodities Strategy is 3.98 times more volatile than American High Income Municipal. It trades about 0.06 of its potential returns per unit of risk. American High Income Municipal is currently generating about 0.05 per unit of risk. If you would invest 2,918 in Commodities Strategy Fund on October 25, 2024 and sell it today you would earn a total of 230.00 from holding Commodities Strategy Fund or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. American High Income Municipal
Performance |
| Timeline |
| Commodities Strategy |
| American High Income |
Commodities Strategy and American High-income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and American High-income
The main advantage of trading using opposite Commodities Strategy and American High-income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy position performs unexpectedly, American High-income 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 American High-income will offset losses from the drop in American High-income's long position.| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Real Estate Fund |
| American High-income vs. Blackrock Pa Muni | American High-income vs. Lord Abbett Intermediate | American High-income vs. Morningstar Municipal Bond | American High-income vs. Gurtin California Muni |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |