Correlation Between Shenkman Floating and Shenkman Short
Can any of the company-specific risk be diversified away by investing in both Shenkman Floating and Shenkman Short 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 Floating and Shenkman Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenkman Floating Rate and Shenkman Short Duration, you can compare the effects of market volatilities on Shenkman Floating and Shenkman Short 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 Floating with a short position of Shenkman Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenkman Floating and Shenkman Short.
Diversification Opportunities for Shenkman Floating and Shenkman Short
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenkman and Shenkman is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shenkman Floating Rate and Shenkman Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenkman Short Duration and Shenkman Floating 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 Floating Rate are associated (or correlated) with Shenkman Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenkman Short Duration has no effect on the direction of Shenkman Floating i.e., Shenkman Floating and Shenkman Short go up and down completely randomly.
Pair Corralation between Shenkman Floating and Shenkman Short
Assuming the 90 days horizon Shenkman Floating Rate is expected to generate 0.77 times more return on investment than Shenkman Short. However, Shenkman Floating Rate is 1.31 times less risky than Shenkman Short. It trades about 0.49 of its potential returns per unit of risk. Shenkman Short Duration is currently generating about 0.26 per unit of risk. If you would invest 892.00 in Shenkman Floating Rate on November 2, 2024 and sell it today you would earn a total of 30.00 from holding Shenkman Floating Rate or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.04% |
| Values | Daily Returns |
Shenkman Floating Rate vs. Shenkman Short Duration
Performance |
| Timeline |
| Shenkman Floating Rate |
| Shenkman Short Duration |
Shenkman Floating and Shenkman Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenkman Floating and Shenkman Short
The main advantage of trading using opposite Shenkman Floating and Shenkman Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenkman Floating position performs unexpectedly, Shenkman Short 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 Short will offset losses from the drop in Shenkman Short's long position.| Shenkman Floating vs. Absolute Convertible Arbitrage | Shenkman Floating vs. Allianzgi Convertible Income | Shenkman Floating vs. Fidelity Sai Convertible | Shenkman Floating vs. Rationalpier 88 Convertible |
| Shenkman Short vs. Shenkman Short Duration | Shenkman Short vs. Shenkman Short Duration | Shenkman Short vs. Shenkman Short Duration | Shenkman Short vs. Shenkman Floating Rate |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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