Correlation Between Pioneer Floating and HYB

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

By analyzing existing cross correlation between Pioneer Floating Rate and HYB, you can compare the effects of market volatilities on Pioneer Floating and HYB 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 Pioneer Floating with a short position of HYB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Floating and HYB.

Diversification Opportunities for Pioneer Floating and HYB

-0.15

Correlation Coefficient

Pioneer Floating  HYB

Good diversification

The 3 months correlation between Pioneer and HYB is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Floating Rate and HYB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYB and Pioneer Floating 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 Pioneer Floating Rate are associated (or correlated) with HYB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYB has no effect on the direction of Pioneer Floating i.e., Pioneer Floating and HYB go up and down completely randomly.

Pair Corralation between Pioneer Floating and HYB

Considering the 90-day investment horizon Pioneer Floating Rate is expected to under-perform the HYB. But the etf apears to be less risky and, when comparing its historical volatility, Pioneer Floating Rate is 1.01 times less risky than HYB. The etf trades about -0.05 of its potential returns per unit of risk. The HYB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  813.00  in HYB on December 24, 2024 and sell it today you would earn a total of  7.00  from holding HYB or generate 0.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	66.67%
Values	Daily Returns

Pioneer Floating Rate  vs.  HYB

Pioneer Floating Rate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pioneer Floating Rate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Pioneer Floating is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

HYB

Risk-Adjusted Performance

Modest

Over the last 90 days HYB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HYB is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pioneer Floating and HYB

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

The idea behind Pioneer Floating Rate and HYB 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.