Correlation Between Bond Fund and Cavanal Hill
Can any of the company-specific risk be diversified away by investing in both Bond Fund and Cavanal Hill 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 Cavanal Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bond Fund Investor and Cavanal Hill Hedged, you can compare the effects of market volatilities on Bond Fund and Cavanal Hill 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 Cavanal Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bond Fund and Cavanal Hill.
Diversification Opportunities for Bond Fund and Cavanal Hill
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bond and Cavanal is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bond Fund Investor and Cavanal Hill Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cavanal Hill Hedged 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 Investor are associated (or correlated) with Cavanal Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cavanal Hill Hedged has no effect on the direction of Bond Fund i.e., Bond Fund and Cavanal Hill go up and down completely randomly.
Pair Corralation between Bond Fund and Cavanal Hill
Assuming the 90 days horizon Bond Fund Investor is expected to generate 0.61 times more return on investment than Cavanal Hill. However, Bond Fund Investor is 1.64 times less risky than Cavanal Hill. It trades about 0.14 of its potential returns per unit of risk. Cavanal Hill Hedged is currently generating about 0.07 per unit of risk. If you would invest 836.00 in Bond Fund Investor on November 18, 2024 and sell it today you would earn a total of 7.00 from holding Bond Fund Investor or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bond Fund Investor vs. Cavanal Hill Hedged
Performance |
| Timeline |
| Bond Fund Investor |
| Cavanal Hill Hedged |
Bond Fund and Cavanal Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bond Fund and Cavanal Hill
The main advantage of trading using opposite Bond Fund and Cavanal Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bond Fund position performs unexpectedly, Cavanal Hill 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 Cavanal Hill will offset losses from the drop in Cavanal Hill's long position.| Bond Fund vs. Tiaa Cref Large Cap Value | Bond Fund vs. American Mutual Fund | Bond Fund vs. Fisher Large Cap | Bond Fund vs. Calvert Large Cap |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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