Correlation Between Tri Continental and Highland Floating
Can any of the company-specific risk be diversified away by investing in both Tri Continental and Highland 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 Tri Continental and Highland Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tri Continental Closed and Highland Floating Rate, you can compare the effects of market volatilities on Tri Continental and Highland 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 Tri Continental with a short position of Highland Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tri Continental and Highland Floating.
Diversification Opportunities for Tri Continental and Highland Floating
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tri and Highland is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Tri Continental Closed and Highland Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Floating Rate and Tri Continental 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 Tri Continental Closed are associated (or correlated) with Highland Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Floating Rate has no effect on the direction of Tri Continental i.e., Tri Continental and Highland Floating go up and down completely randomly.
Pair Corralation between Tri Continental and Highland Floating
Allowing for the 90-day total investment horizon Tri Continental Closed is expected to generate 0.41 times more return on investment than Highland Floating. However, Tri Continental Closed is 2.46 times less risky than Highland Floating. It trades about 0.13 of its potential returns per unit of risk. Highland Floating Rate is currently generating about -0.04 per unit of risk. If you would invest 2,507 in Tri Continental Closed on August 31, 2024 and sell it today you would earn a total of 941.00 from holding Tri Continental Closed or generate 37.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tri Continental Closed vs. Highland Floating Rate
Performance |
| Timeline |
| Tri Continental Closed |
| Highland Floating Rate |
Tri Continental and Highland Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tri Continental and Highland Floating
The main advantage of trading using opposite Tri Continental and Highland Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tri Continental position performs unexpectedly, Highland 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 Highland Floating will offset losses from the drop in Highland Floating's long position.| Tri Continental vs. Eaton Vance Tax | Tri Continental vs. Blackrock Muniyield | Tri Continental vs. Eaton Vance Tax | Tri Continental vs. Eaton Vance Tax |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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