Correlation Between High Yield and William Blair
Can any of the company-specific risk be diversified away by investing in both High Yield and William Blair 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 Yield and William Blair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Fund and William Blair International, you can compare the effects of market volatilities on High Yield and William Blair 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 Yield with a short position of William Blair. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and William Blair.
Diversification Opportunities for High Yield and William Blair
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between High and William is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Fund and William Blair International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Blair Intern and High Yield 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 Yield Fund are associated (or correlated) with William Blair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Blair Intern has no effect on the direction of High Yield i.e., High Yield and William Blair go up and down completely randomly.
Pair Corralation between High Yield and William Blair
Assuming the 90 days horizon High Yield is expected to generate 3.23 times less return on investment than William Blair. But when comparing it to its historical volatility, High Yield Fund is 2.93 times less risky than William Blair. It trades about 0.3 of its potential returns per unit of risk. William Blair International is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,843 in William Blair International on March 31, 2025 and sell it today you would earn a total of 238.00 from holding William Blair International or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Fund vs. William Blair International
Performance |
| Timeline |
| High Yield Fund |
| William Blair Intern |
High Yield and William Blair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and William Blair
The main advantage of trading using opposite High Yield and William Blair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, William Blair 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 William Blair will offset losses from the drop in William Blair's long position.| High Yield vs. Emerging Markets Bond | High Yield vs. Pimco Foreign Bond | High Yield vs. Real Return Fund | High Yield vs. Total Return Fund |
| William Blair vs. Mesirow Financial High | William Blair vs. Icon Financial Fund | William Blair vs. Financials Ultrasector Profund | William Blair vs. Fidelity Advisor Financial |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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