Correlation Between Bond Fund and Strategic Enhanced
Can any of the company-specific risk be diversified away by investing in both Bond Fund and Strategic Enhanced 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 Bond Fund and Strategic Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bond Fund Institutional and Strategic Enhanced Yield, you can compare the effects of market volatilities on Bond Fund and Strategic Enhanced 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 Bond Fund with a short position of Strategic Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bond Fund and Strategic Enhanced.
Diversification Opportunities for Bond Fund and Strategic Enhanced
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Bond and Strategic is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Bond Fund Institutional and Strategic Enhanced Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Enhanced Yield and Bond Fund 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 Bond Fund Institutional are associated (or correlated) with Strategic Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Enhanced Yield has no effect on the direction of Bond Fund i.e., Bond Fund and Strategic Enhanced go up and down completely randomly.
Pair Corralation between Bond Fund and Strategic Enhanced
Assuming the 90 days horizon Bond Fund Institutional is expected to generate 1.13 times more return on investment than Strategic Enhanced. However, Bond Fund is 1.13 times more volatile than Strategic Enhanced Yield. It trades about -0.04 of its potential returns per unit of risk. Strategic Enhanced Yield is currently generating about -0.1 per unit of risk. If you would invest 853.00 in Bond Fund Institutional on August 28, 2024 and sell it today you would lose (6.00) from holding Bond Fund Institutional or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bond Fund Institutional vs. Strategic Enhanced Yield
Performance |
| Timeline |
| Bond Fund Institutional |
| Strategic Enhanced Yield |
Bond Fund and Strategic Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bond Fund and Strategic Enhanced
The main advantage of trading using opposite Bond Fund and Strategic Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bond Fund position performs unexpectedly, Strategic Enhanced 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 Strategic Enhanced will offset losses from the drop in Strategic Enhanced's long position.| Bond Fund vs. Strategic Enhanced Yield | Bond Fund vs. Cavanal Hill Hedged | Bond Fund vs. Limited Duration Fund | Bond Fund vs. Cavanal Hill Ultra |
| Strategic Enhanced vs. Bond Fund Investor | Strategic Enhanced vs. Cavanal Hill Hedged | Strategic Enhanced vs. Limited Duration Fund | Strategic Enhanced vs. Cavanal Hill Ultra |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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