Correlation Between International Investors and Lifex Inflation-protec
Can any of the company-specific risk be diversified away by investing in both International Investors and Lifex Inflation-protec 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 International Investors and Lifex Inflation-protec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and Lifex Inflation Protected Income, you can compare the effects of market volatilities on International Investors and Lifex Inflation-protec 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 International Investors with a short position of Lifex Inflation-protec. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Lifex Inflation-protec.
Diversification Opportunities for International Investors and Lifex Inflation-protec
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and Lifex is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Lifex Inflation Protected Inco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Inflation-protec and International Investors 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 International Investors Gold are associated (or correlated) with Lifex Inflation-protec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Inflation-protec has no effect on the direction of International Investors i.e., International Investors and Lifex Inflation-protec go up and down completely randomly.
Pair Corralation between International Investors and Lifex Inflation-protec
Assuming the 90 days horizon International Investors Gold is expected to generate 6.86 times more return on investment than Lifex Inflation-protec. However, International Investors is 6.86 times more volatile than Lifex Inflation Protected Income. It trades about 0.08 of its potential returns per unit of risk. Lifex Inflation Protected Income is currently generating about 0.18 per unit of risk. If you would invest 1,046 in International Investors Gold on September 5, 2024 and sell it today you would earn a total of 170.00 from holding International Investors Gold or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.0% |
| Values | Daily Returns |
International Investors Gold vs. Lifex Inflation Protected Inco
Performance |
| Timeline |
| International Investors |
| Lifex Inflation-protec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
International Investors and Lifex Inflation-protec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Lifex Inflation-protec
The main advantage of trading using opposite International Investors and Lifex Inflation-protec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors position performs unexpectedly, Lifex Inflation-protec 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 Lifex Inflation-protec will offset losses from the drop in Lifex Inflation-protec's long position.| International Investors vs. Eic Value Fund | International Investors vs. Issachar Fund Class | International Investors vs. Ab Small Cap | International Investors vs. Vanguard Windsor Fund |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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