Correlation Between Pax High and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Pax High and NYSE Composite 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 Pax High and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pax High Yield and NYSE Composite, you can compare the effects of market volatilities on Pax High and NYSE Composite 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 Pax High with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pax High and NYSE Composite.
Diversification Opportunities for Pax High and NYSE Composite
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pax and NYSE is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Pax High Yield and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Pax High 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 Pax High Yield are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Pax High i.e., Pax High and NYSE Composite go up and down completely randomly.
Pair Corralation between Pax High and NYSE Composite
Assuming the 90 days horizon Pax High Yield is expected to generate 0.44 times more return on investment than NYSE Composite. However, Pax High Yield is 2.27 times less risky than NYSE Composite. It trades about 0.03 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.12 per unit of risk. If you would invest 593.00 in Pax High Yield on February 5, 2024 and sell it today you would earn a total of 1.00 from holding Pax High Yield or generate 0.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pax High Yield vs. NYSE Composite
Performance |
Timeline |
Pax High and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Pax High Yield
Pair trading matchups for Pax High
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Pax High and NYSE Composite
The main advantage of trading using opposite Pax High and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pax High position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Pax High vs. Vanguard High Yield Porate | Pax High vs. Blackrock Hi Yld | Pax High vs. Blackrock Hi Yld | Pax High vs. American Funds American |
NYSE Composite vs. Bridgford Foods | NYSE Composite vs. SunOpta | NYSE Composite vs. Where Food Comes | NYSE Composite vs. Sligro Food Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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