Correlation Between CBH and Miller/howard High

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

By analyzing existing cross correlation between CBH and Millerhoward High Income, you can compare the effects of market volatilities on CBH and Miller/howard High 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 CBH with a short position of Miller/howard High. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBH and Miller/howard High.

Diversification Opportunities for CBH and Miller/howard High

0.95

Correlation Coefficient

CBH  Miller/howard High

Almost no diversification

The 3 months correlation between CBH and Miller/howard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding CBH and Millerhoward High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millerhoward High Income and CBH 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 CBH are associated (or correlated) with Miller/howard High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millerhoward High Income has no effect on the direction of CBH i.e., CBH and Miller/howard High go up and down completely randomly.

Pair Corralation between CBH and Miller/howard High

If you would invest  1,180  in Millerhoward High Income on August 31, 2024 and sell it today you would earn a total of  76.00  from holding Millerhoward High Income or generate 6.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	1.72%
Values	Daily Returns

CBH  vs.  Millerhoward High Income

CBH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Millerhoward High Income

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Millerhoward High Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather inconsistent forward indicators, Miller/howard High may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with CBH and Miller/howard High

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

The idea behind CBH and Millerhoward High Income 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.