Correlation Between Intermediate Bond and Bond Fund
Can any of the company-specific risk be diversified away by investing in both Intermediate Bond and Bond Fund 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 Intermediate Bond and Bond Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Bond Fund and Bond Fund Of, you can compare the effects of market volatilities on Intermediate Bond and Bond Fund 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 Intermediate Bond with a short position of Bond Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Bond and Bond Fund.
Diversification Opportunities for Intermediate Bond and Bond Fund
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Intermediate and Bond is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Bond Fund and Bond Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund and Intermediate 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 Intermediate Bond Fund are associated (or correlated) with Bond Fund. 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 Intermediate Bond i.e., Intermediate Bond and Bond Fund go up and down completely randomly.
Pair Corralation between Intermediate Bond and Bond Fund
Assuming the 90 days horizon Intermediate Bond Fund is expected to generate 0.71 times more return on investment than Bond Fund. However, Intermediate Bond Fund is 1.41 times less risky than Bond Fund. It trades about 0.04 of its potential returns per unit of risk. Bond Fund Of is currently generating about 0.03 per unit of risk. If you would invest 1,195 in Intermediate Bond Fund on August 31, 2024 and sell it today you would earn a total of 54.00 from holding Intermediate Bond Fund or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Bond Fund vs. Bond Fund Of
Performance |
| Timeline |
| Intermediate Bond |
| Bond Fund |
Intermediate Bond and Bond Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Bond and Bond Fund
The main advantage of trading using opposite Intermediate Bond and Bond Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Bond position performs unexpectedly, Bond Fund 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 Bond Fund will offset losses from the drop in Bond Fund's long position.| Intermediate Bond vs. Bond Fund Of | Intermediate Bond vs. American High Income | Intermediate Bond vs. Smallcap World Fund | Intermediate Bond vs. Capital World Bond |
| Bond Fund vs. American High Income | Bond Fund vs. Europacific Growth Fund | Bond Fund vs. Capital World Bond | Bond Fund vs. Growth Fund Of |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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