Correlation Between Pioneer Floating and CBH

Can any of the company-specific risk be diversified away by investing in both Pioneer Floating and CBH 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 CBH 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 CBH, you can compare the effects of market volatilities on Pioneer Floating and CBH 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 CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Floating and CBH.

Diversification Opportunities for Pioneer Floating and CBH

0.74

Correlation Coefficient

Pioneer Floating  CBH

Poor diversification

The 3 months correlation between Pioneer and CBH is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Floating Rate and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH 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 CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Pioneer Floating i.e., Pioneer Floating and CBH go up and down completely randomly.

Pair Corralation between Pioneer Floating and CBH

If you would invest  961.00  in Pioneer Floating Rate on September 27, 2024 and sell it today you would earn a total of  14.00  from holding Pioneer Floating Rate or generate 1.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	3.13%
Values	Daily Returns

Pioneer Floating Rate  vs.  CBH

Pioneer Floating Rate

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Floating Rate are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

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.

Pair Trading with Pioneer Floating and CBH

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

The idea behind Pioneer Floating Rate and CBH 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.