Correlation Between Cb Large and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Cb Large and Floating Rate 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 Cb Large and Floating Rate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cb Large Cap and Floating Rate Fund, you can compare the effects of market volatilities on Cb Large and Floating Rate 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 Cb Large with a short position of Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cb Large and Floating Rate.
Diversification Opportunities for Cb Large and Floating Rate
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CBLSX and Floating is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cb Large Cap and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate and Cb Large 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 Cb Large Cap are associated (or correlated) with Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Cb Large i.e., Cb Large and Floating Rate go up and down completely randomly.
Pair Corralation between Cb Large and Floating Rate
Assuming the 90 days horizon Cb Large Cap is expected to under-perform the Floating Rate. In addition to that, Cb Large is 23.18 times more volatile than Floating Rate Fund. It trades about -0.14 of its total potential returns per unit of risk. Floating Rate Fund is currently generating about 0.13 per unit of volatility. If you would invest 804.00 in Floating Rate Fund on December 5, 2024 and sell it today you would earn a total of 9.00 from holding Floating Rate Fund or generate 1.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cb Large Cap vs. Floating Rate Fund
Performance |
Timeline |
Cb Large Cap |
Floating Rate |
Cb Large and Floating Rate Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cb Large and Floating Rate
The main advantage of trading using opposite Cb Large and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cb Large position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.Cb Large vs. Cb Large Cap | Cb Large vs. Invesco Disciplined Equity | Cb Large vs. Federated Mdt Large | Cb Large vs. Janus Forty Fund |
Floating Rate vs. Msift High Yield | Floating Rate vs. Prudential High Yield | Floating Rate vs. Metropolitan West High | Floating Rate vs. Pioneer High Income |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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