Correlation Between Palmer Square and E Fixed

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

By analyzing existing cross correlation between Palmer Square Ultra Short and The E Fixed, you can compare the effects of market volatilities on Palmer Square and E Fixed 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 Palmer Square with a short position of E Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palmer Square and E Fixed.

Diversification Opportunities for Palmer Square and E Fixed

-0.7

Correlation Coefficient

Palmer Square  E Fixed

Excellent diversification

The 3 months correlation between Palmer and HCIIX is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Palmer Square Ultra Short and The E Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Fixed and Palmer Square 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 Palmer Square Ultra Short are associated (or correlated) with E Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Fixed has no effect on the direction of Palmer Square i.e., Palmer Square and E Fixed go up and down completely randomly.

Pair Corralation between Palmer Square and E Fixed

Assuming the 90 days horizon Palmer Square Ultra Short is expected to generate 0.58 times more return on investment than E Fixed. However, Palmer Square Ultra Short is 1.72 times less risky than E Fixed. It trades about -0.01 of its potential returns per unit of risk. The E Fixed is currently generating about -0.22 per unit of risk. If you would invest  1,989  in Palmer Square Ultra Short on September 29, 2024 and sell it today you would lose (3.00) from holding Palmer Square Ultra Short or give up 0.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Palmer Square Ultra Short  vs.  The E Fixed

Palmer Square Ultra

Risk-Adjusted Performance

0 of 100

Market Crasher

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

E Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Palmer Square and E Fixed

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

The idea behind Palmer Square Ultra Short and The E Fixed 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.