Correlation Between Core Bond and Pro-blend(r) Maximum
Can any of the company-specific risk be diversified away by investing in both Core Bond and Pro-blend(r) Maximum 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 Core Bond and Pro-blend(r) Maximum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Bond Series and Pro Blend Maximum Term, you can compare the effects of market volatilities on Core Bond and Pro-blend(r) Maximum 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 Core Bond with a short position of Pro-blend(r) Maximum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Bond and Pro-blend(r) Maximum.
Diversification Opportunities for Core Bond and Pro-blend(r) Maximum
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Core and Pro-blend(r) is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Core Bond Series and Pro Blend Maximum Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro-blend(r) Maximum and Core Bond 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 Core Bond Series are associated (or correlated) with Pro-blend(r) Maximum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro-blend(r) Maximum has no effect on the direction of Core Bond i.e., Core Bond and Pro-blend(r) Maximum go up and down completely randomly.
Pair Corralation between Core Bond and Pro-blend(r) Maximum
Assuming the 90 days horizon Core Bond is expected to generate 7.23 times less return on investment than Pro-blend(r) Maximum. But when comparing it to its historical volatility, Core Bond Series is 1.81 times less risky than Pro-blend(r) Maximum. It trades about 0.04 of its potential returns per unit of risk. Pro Blend Maximum Term is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,672 in Pro Blend Maximum Term on August 30, 2024 and sell it today you would earn a total of 68.00 from holding Pro Blend Maximum Term or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Core Bond Series vs. Pro Blend Maximum Term
Performance |
| Timeline |
| Core Bond Series |
| Pro-blend(r) Maximum |
Core Bond and Pro-blend(r) Maximum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Bond and Pro-blend(r) Maximum
The main advantage of trading using opposite Core Bond and Pro-blend(r) Maximum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Bond position performs unexpectedly, Pro-blend(r) Maximum 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 Pro-blend(r) Maximum will offset losses from the drop in Pro-blend(r) Maximum's long position.| Core Bond vs. Unconstrained Bond Series | Core Bond vs. Pro Blend Moderate Term | Core Bond vs. High Yield Bond | Core Bond vs. Overseas Series Class |
| Pro-blend(r) Maximum vs. Ab High Income | Pro-blend(r) Maximum vs. Artisan High Income | Pro-blend(r) Maximum vs. Victory High Income | Pro-blend(r) Maximum vs. Strategic Allocation Aggressive |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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