Correlation Between High Income and Target Managed

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

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

Diversification Opportunities for High Income and Target Managed

0.0

Correlation Coefficient

High Income  Target Managed

Pay attention - limited upside

The 3 months correlation between High and Target is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding High Income Fund and Target Managed Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Managed Allocation and High Income 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 High Income Fund are associated (or correlated) with Target Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Managed Allocation has no effect on the direction of High Income i.e., High Income and Target Managed go up and down completely randomly.

Pair Corralation between High Income and Target Managed

If you would invest  665.00  in High Income Fund on April 24, 2025 and sell it today you would earn a total of  28.00  from holding High Income Fund or generate 4.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

High Income Fund  vs.  Target Managed Allocation

High Income Fund

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in High Income Fund are ranked lower than 34 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, High Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Target Managed Allocation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Target Managed Allocation are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Target Managed may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with High Income and Target Managed

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

The idea behind High Income Fund and Target Managed Allocation 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.