Correlation Between Shenkman Short and Shenkman Floating
Can any of the company-specific risk be diversified away by investing in both Shenkman Short and Shenkman 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 Shenkman Short and Shenkman Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenkman Short Duration and Shenkman Floating Rate, you can compare the effects of market volatilities on Shenkman Short and Shenkman 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 Shenkman Short with a short position of Shenkman Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenkman Short and Shenkman Floating.
Diversification Opportunities for Shenkman Short and Shenkman Floating
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenkman and Shenkman is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shenkman Short Duration and Shenkman Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenkman Floating Rate and Shenkman Short 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 Shenkman Short Duration are associated (or correlated) with Shenkman Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenkman Floating Rate has no effect on the direction of Shenkman Short i.e., Shenkman Short and Shenkman Floating go up and down completely randomly.
Pair Corralation between Shenkman Short and Shenkman Floating
Assuming the 90 days horizon Shenkman Short is expected to generate 2.16 times less return on investment than Shenkman Floating. But when comparing it to its historical volatility, Shenkman Short Duration is 1.23 times less risky than Shenkman Floating. It trades about 0.04 of its potential returns per unit of risk. Shenkman Floating Rate is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 915.00 in Shenkman Floating Rate on September 3, 2024 and sell it today you would earn a total of 2.00 from holding Shenkman Floating Rate or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenkman Short Duration vs. Shenkman Floating Rate
Performance |
| Timeline |
| Shenkman Short Duration |
| Shenkman Floating Rate |
Shenkman Short and Shenkman Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenkman Short and Shenkman Floating
The main advantage of trading using opposite Shenkman Short and Shenkman Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenkman Short position performs unexpectedly, Shenkman 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 Shenkman Floating will offset losses from the drop in Shenkman Floating's long position.| Shenkman Short vs. Vanguard High Yield Corporate | Shenkman Short vs. Vanguard High Yield Porate | Shenkman Short vs. Blackrock Hi Yld | Shenkman Short vs. Blackrock High Yield |
| Shenkman Floating vs. Rbb Fund | Shenkman Floating vs. Kinetics Small Cap | Shenkman Floating vs. Qs Small Capitalization | Shenkman Floating vs. Small Midcap Dividend 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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