Correlation Between Bond Fund and Total Return
Can any of the company-specific risk be diversified away by investing in both Bond Fund and Total Return 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 Total Return into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bond Fund Of and Total Return Bond, you can compare the effects of market volatilities on Bond Fund and Total Return 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 Total Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bond Fund and Total Return.
Diversification Opportunities for Bond Fund and Total Return
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bond and Total is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Bond Fund Of and Total Return Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Return Bond 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 Of are associated (or correlated) with Total Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Return Bond has no effect on the direction of Bond Fund i.e., Bond Fund and Total Return go up and down completely randomly.
Pair Corralation between Bond Fund and Total Return
Assuming the 90 days horizon Bond Fund is expected to generate 1.16 times less return on investment than Total Return. In addition to that, Bond Fund is 1.01 times more volatile than Total Return Bond. It trades about 0.04 of its total potential returns per unit of risk. Total Return Bond is currently generating about 0.04 per unit of volatility. If you would invest 1,045 in Total Return Bond on September 2, 2024 and sell it today you would earn a total of 68.00 from holding Total Return Bond or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bond Fund Of vs. Total Return Bond
Performance |
| Timeline |
| Bond Fund |
| Total Return Bond |
Bond Fund and Total Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bond Fund and Total Return
The main advantage of trading using opposite Bond Fund and Total Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bond Fund position performs unexpectedly, Total Return 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 Total Return will offset losses from the drop in Total Return's long position.| Bond Fund vs. American High Income | Bond Fund vs. Europacific Growth Fund | Bond Fund vs. Capital World Bond | Bond Fund vs. Growth Fund Of |
| Total Return vs. Europac Gold Fund | Total Return vs. International Investors Gold | Total Return vs. Invesco Gold Special | Total Return vs. Goldman Sachs Clean |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |