Correlation Between International Fund and High Income
Can any of the company-specific risk be diversified away by investing in both International Fund and High Income 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 International Fund and High Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Fund International and High Income Fund, you can compare the effects of market volatilities on International Fund and High Income 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 International Fund with a short position of High Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Fund and High Income.
Diversification Opportunities for International Fund and High Income
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and High is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding International Fund Internation and High Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Income Fund and International Fund 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 International Fund International are associated (or correlated) with High Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Income Fund has no effect on the direction of International Fund i.e., International Fund and High Income go up and down completely randomly.
Pair Corralation between International Fund and High Income
Assuming the 90 days horizon International Fund International is expected to generate 4.42 times more return on investment than High Income. However, International Fund is 4.42 times more volatile than High Income Fund. It trades about 0.04 of its potential returns per unit of risk. High Income Fund is currently generating about 0.15 per unit of risk. If you would invest 2,588 in International Fund International on August 25, 2024 and sell it today you would earn a total of 172.00 from holding International Fund International or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Fund Internation vs. High Income Fund
Performance |
| Timeline |
| International Fund |
| High Income Fund |
International Fund and High Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Fund and High Income
The main advantage of trading using opposite International Fund and High Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Fund position performs unexpectedly, High Income 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 Income will offset losses from the drop in High Income's long position.| International Fund vs. Balanced Fund Retail | International Fund vs. Artisan Select Equity | International Fund vs. Small Cap Equity | International Fund vs. Gmo Global Equity |
| High Income vs. Capital Growth Fund | High Income vs. Emerging Markets Fund | High Income vs. International Fund International | High Income vs. Growth Income 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |