Correlation Between Inverse High and Intech Managed

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

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

Diversification Opportunities for Inverse High and Intech Managed

0.09

Correlation Coefficient

Inverse High  Intech Managed

Significant diversification

The 3 months correlation between Inverse and Intech is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Inverse High Yield and Intech Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intech Managed Volatility and Inverse High 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 Inverse High Yield are associated (or correlated) with Intech Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intech Managed Volatility has no effect on the direction of Inverse High i.e., Inverse High and Intech Managed go up and down completely randomly.

Pair Corralation between Inverse High and Intech Managed

Assuming the 90 days horizon Inverse High Yield is expected to generate 0.34 times more return on investment than Intech Managed. However, Inverse High Yield is 2.96 times less risky than Intech Managed. It trades about 0.2 of its potential returns per unit of risk. Intech Managed Volatility is currently generating about -0.13 per unit of risk. If you would invest  4,921  in Inverse High Yield on September 24, 2024 and sell it today you would earn a total of  68.00  from holding Inverse High Yield or generate 1.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Inverse High Yield  vs.  Intech Managed Volatility

Inverse High Yield

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inverse High Yield are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Inverse High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Intech Managed Volatility

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intech Managed Volatility are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Intech Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Inverse High and Intech Managed

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

The idea behind Inverse High Yield and Intech Managed Volatility 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.