Correlation Between Stet California and Pace High
Can any of the company-specific risk be diversified away by investing in both Stet California and Pace 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 Stet California and Pace High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stet California Municipal and Pace High Yield, you can compare the effects of market volatilities on Stet California and Pace 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 Stet California with a short position of Pace High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stet California and Pace High.
Diversification Opportunities for Stet California and Pace High
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stet and Pace is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Stet California Municipal and Pace High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace High Yield and Stet California 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 Stet California Municipal are associated (or correlated) with Pace High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace High Yield has no effect on the direction of Stet California i.e., Stet California and Pace High go up and down completely randomly.
Pair Corralation between Stet California and Pace High
Assuming the 90 days horizon Stet California Municipal is expected to generate 0.95 times more return on investment than Pace High. However, Stet California Municipal is 1.05 times less risky than Pace High. It trades about 0.6 of its potential returns per unit of risk. Pace High Yield is currently generating about 0.47 per unit of risk. If you would invest 1,018 in Stet California Municipal on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Stet California Municipal or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stet California Municipal vs. Pace High Yield
Performance |
| Timeline |
| Stet California Municipal |
| Pace High Yield |
Stet California and Pace High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stet California and Pace High
The main advantage of trading using opposite Stet California and Pace High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stet California position performs unexpectedly, Pace 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 Pace High will offset losses from the drop in Pace High's long position.| Stet California vs. Ridgeworth Seix Government | Stet California vs. Elfun Government Money | Stet California vs. Us Government Securities | Stet California vs. Schwab Government Money |
| Pace High vs. Pace Smallmedium Value | Pace High vs. Pace International Equity | Pace High vs. Pace International Equity | Pace High vs. Ubs Allocation 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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