Correlation Between Quadratic Deflation and US Treasury
Can any of the company-specific risk be diversified away by investing in both Quadratic Deflation and US Treasury 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 Quadratic Deflation and US Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quadratic Deflation ETF and US Treasury 30, you can compare the effects of market volatilities on Quadratic Deflation and US Treasury 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 Quadratic Deflation with a short position of US Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quadratic Deflation and US Treasury.
Diversification Opportunities for Quadratic Deflation and US Treasury
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Quadratic and UTHY is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Quadratic Deflation ETF and US Treasury 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Treasury 30 and Quadratic Deflation 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 Quadratic Deflation ETF are associated (or correlated) with US Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Treasury 30 has no effect on the direction of Quadratic Deflation i.e., Quadratic Deflation and US Treasury go up and down completely randomly.
Pair Corralation between Quadratic Deflation and US Treasury
Given the investment horizon of 90 days Quadratic Deflation ETF is expected to generate 0.88 times more return on investment than US Treasury. However, Quadratic Deflation ETF is 1.14 times less risky than US Treasury. It trades about -0.01 of its potential returns per unit of risk. US Treasury 30 is currently generating about -0.02 per unit of risk. If you would invest 1,456 in Quadratic Deflation ETF on August 26, 2024 and sell it today you would lose (54.00) from holding Quadratic Deflation ETF or give up 3.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quadratic Deflation ETF vs. US Treasury 30
Performance |
| Timeline |
| Quadratic Deflation ETF |
| US Treasury 30 |
Quadratic Deflation and US Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quadratic Deflation and US Treasury
The main advantage of trading using opposite Quadratic Deflation and US Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quadratic Deflation position performs unexpectedly, US Treasury 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 US Treasury will offset losses from the drop in US Treasury's long position.| Quadratic Deflation vs. Quadratic Interest Rate | Quadratic Deflation vs. Simplify Exchange Traded | Quadratic Deflation vs. AGFiQ Market Neutral | Quadratic Deflation vs. Simplify Interest Rate |
| US Treasury vs. iShares Treasury Floating | US Treasury vs. iShares iBonds Dec | US Treasury vs. iShares iBonds Dec | US Treasury vs. iShares 0 3 Month |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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