Correlation Between Transamerica Intermediate and High Yield
Can any of the company-specific risk be diversified away by investing in both Transamerica Intermediate and High Yield 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 Transamerica Intermediate and High Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Intermediate Muni and High Yield Municipal Fund, you can compare the effects of market volatilities on Transamerica Intermediate and High Yield 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 Transamerica Intermediate with a short position of High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Intermediate and High Yield.
Diversification Opportunities for Transamerica Intermediate and High Yield
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Transamerica and High is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Intermediate Muni and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal and Transamerica Intermediate 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 Transamerica Intermediate Muni are associated (or correlated) with High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of Transamerica Intermediate i.e., Transamerica Intermediate and High Yield go up and down completely randomly.
Pair Corralation between Transamerica Intermediate and High Yield
Assuming the 90 days horizon Transamerica Intermediate Muni is expected to generate 0.88 times more return on investment than High Yield. However, Transamerica Intermediate Muni is 1.14 times less risky than High Yield. It trades about 0.09 of its potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.04 per unit of risk. If you would invest 1,079 in Transamerica Intermediate Muni on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Transamerica Intermediate Muni or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Transamerica Intermediate Muni vs. High Yield Municipal Fund
Performance |
| Timeline |
| Transamerica Intermediate |
| High Yield Municipal |
Transamerica Intermediate and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Intermediate and High Yield
The main advantage of trading using opposite Transamerica Intermediate and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Intermediate position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Transamerica Intermediate vs. Champlain Mid Cap | Transamerica Intermediate vs. Praxis Growth Index | Transamerica Intermediate vs. Artisan Small Cap | Transamerica Intermediate vs. Chase Growth Fund |
| High Yield vs. Old Westbury Municipal | High Yield vs. Transamerica Intermediate Muni | High Yield vs. Morningstar Municipal Bond | High Yield vs. Baird Strategic Municipal |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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