Correlation Between Strategic Enhanced and Bond Fund
Can any of the company-specific risk be diversified away by investing in both Strategic Enhanced and Bond Fund 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 Strategic Enhanced and Bond Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Enhanced Yield and Bond Fund Investor, you can compare the effects of market volatilities on Strategic Enhanced and Bond Fund 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 Strategic Enhanced with a short position of Bond Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Enhanced and Bond Fund.
Diversification Opportunities for Strategic Enhanced and Bond Fund
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Strategic and Bond is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Enhanced Yield and Bond Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund Investor and Strategic Enhanced 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 Strategic Enhanced Yield are associated (or correlated) with Bond Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bond Fund Investor has no effect on the direction of Strategic Enhanced i.e., Strategic Enhanced and Bond Fund go up and down completely randomly.
Pair Corralation between Strategic Enhanced and Bond Fund
Assuming the 90 days horizon Strategic Enhanced Yield is expected to generate 0.82 times more return on investment than Bond Fund. However, Strategic Enhanced Yield is 1.22 times less risky than Bond Fund. It trades about 0.06 of its potential returns per unit of risk. Bond Fund Investor is currently generating about 0.04 per unit of risk. If you would invest 802.00 in Strategic Enhanced Yield on August 31, 2024 and sell it today you would earn a total of 72.00 from holding Strategic Enhanced Yield or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Enhanced Yield vs. Bond Fund Investor
Performance |
| Timeline |
| Strategic Enhanced Yield |
| Bond Fund Investor |
Strategic Enhanced and Bond Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Enhanced and Bond Fund
The main advantage of trading using opposite Strategic Enhanced and Bond Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Enhanced position performs unexpectedly, Bond Fund 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 Bond Fund will offset losses from the drop in Bond Fund's long position.| Strategic Enhanced vs. Pace Smallmedium Value | Strategic Enhanced vs. Victory Rs Partners | Strategic Enhanced vs. Applied Finance Explorer | Strategic Enhanced vs. Vanguard Small Cap Value |
| Bond Fund vs. Lord Abbett Inflation | Bond Fund vs. Cref Inflation Linked Bond | Bond Fund vs. Ab Bond Inflation | Bond Fund vs. Ab Bond Inflation |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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