Correlation Between Absolute Strategies and The Bond
Can any of the company-specific risk be diversified away by investing in both Absolute Strategies and The Bond 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 Absolute Strategies and The Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Strategies Fund and The Bond Fund, you can compare the effects of market volatilities on Absolute Strategies and The Bond 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 Absolute Strategies with a short position of The Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Strategies and The Bond.
Diversification Opportunities for Absolute Strategies and The Bond
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Absolute and The is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Strategies Fund and The Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund and Absolute Strategies 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 Absolute Strategies Fund are associated (or correlated) with The Bond. 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 has no effect on the direction of Absolute Strategies i.e., Absolute Strategies and The Bond go up and down completely randomly.
Pair Corralation between Absolute Strategies and The Bond
If you would invest 1,762 in The Bond Fund on November 3, 2024 and sell it today you would earn a total of 5.00 from holding The Bond Fund or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Absolute Strategies Fund vs. The Bond Fund
Performance |
| Timeline |
| Absolute Strategies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bond Fund |
Absolute Strategies and The Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Strategies and The Bond
The main advantage of trading using opposite Absolute Strategies and The Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Strategies position performs unexpectedly, The Bond 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 The Bond will offset losses from the drop in The Bond's long position.| Absolute Strategies vs. Federated High Yield | Absolute Strategies vs. Virtus High Yield | Absolute Strategies vs. Artisan High Income | Absolute Strategies vs. Tiaa Cref High Yield |
| The Bond vs. Stringer Growth Fund | The Bond vs. Praxis Genesis Growth | The Bond vs. Mid Cap Growth | The Bond vs. Growth Allocation Fund |
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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