Correlation Between Pax High and Shenkman Short
Can any of the company-specific risk be diversified away by investing in both Pax High and Shenkman Short 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 Pax High and Shenkman Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pax High Yield and Shenkman Short Duration, you can compare the effects of market volatilities on Pax High and Shenkman Short 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 Pax High with a short position of Shenkman Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pax High and Shenkman Short.
Diversification Opportunities for Pax High and Shenkman Short
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Pax and Shenkman is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Pax High Yield and Shenkman Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenkman Short Duration and Pax 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 Pax High Yield are associated (or correlated) with Shenkman Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenkman Short Duration has no effect on the direction of Pax High i.e., Pax High and Shenkman Short go up and down completely randomly.
Pair Corralation between Pax High and Shenkman Short
Assuming the 90 days horizon Pax High Yield is expected to generate 2.24 times more return on investment than Shenkman Short. However, Pax High is 2.24 times more volatile than Shenkman Short Duration. It trades about 0.35 of its potential returns per unit of risk. Shenkman Short Duration is currently generating about 0.52 per unit of risk. If you would invest 591.00 in Pax High Yield on April 24, 2025 and sell it today you would earn a total of 23.00 from holding Pax High Yield or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pax High Yield vs. Shenkman Short Duration
Performance |
| Timeline |
| Pax High Yield |
| Shenkman Short Duration |
Pax High and Shenkman Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pax High and Shenkman Short
The main advantage of trading using opposite Pax High and Shenkman Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pax High position performs unexpectedly, Shenkman Short 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 Shenkman Short will offset losses from the drop in Shenkman Short's long position.| Pax High vs. Pax Balanced Fund | Pax High vs. Pax Esg Beta | Pax High vs. Pear Tree Polaris | Pax High vs. Tcw E Fixed |
| Shenkman Short vs. Western Asset Diversified | Shenkman Short vs. Siit Small Cap | Shenkman Short vs. Ab Small Cap | Shenkman Short vs. Glg Intl Small |
Check out your portfolio center.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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