Correlation Between High Yield and SPENN Technology

Can any of the company-specific risk be diversified away by investing in both High Yield and SPENN Technology 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 High Yield and SPENN Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between High Yield Municipal Fund and SPENN Technology AS, you can compare the effects of market volatilities on High Yield and SPENN Technology 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 High Yield with a short position of SPENN Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and SPENN Technology.

Diversification Opportunities for High Yield and SPENN Technology

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Correlation Coefficient

High Yield  SPENN Technology

Pay attention - limited upside

The 3 months correlation between High and SPENN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and SPENN Technology AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPENN Technology and High Yield 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 High Yield Municipal Fund are associated (or correlated) with SPENN Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPENN Technology has no effect on the direction of High Yield i.e., High Yield and SPENN Technology go up and down completely randomly.

Pair Corralation between High Yield and SPENN Technology

Assuming the 90 days horizon High Yield Municipal Fund is expected to generate 0.12 times more return on investment than SPENN Technology. However, High Yield Municipal Fund is 8.6 times less risky than SPENN Technology. It trades about 0.08 of its potential returns per unit of risk. SPENN Technology AS is currently generating about -0.06 per unit of risk. If you would invest  800.00  in High Yield Municipal Fund on September 20, 2024 and sell it today you would earn a total of  93.00  from holding High Yield Municipal Fund or generate 11.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	89.49%
Values	Daily Returns

High Yield Municipal Fund  vs.  SPENN Technology AS

High Yield Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days High Yield Municipal Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, High Yield is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SPENN Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPENN Technology AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SPENN Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with High Yield and SPENN Technology

The main advantage of trading using opposite High Yield and SPENN Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, SPENN Technology 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 SPENN Technology will offset losses from the drop in SPENN Technology's long position.

The idea behind High Yield Municipal Fund and SPENN Technology AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.