Correlation Between International Investors and Municipal Bond
Can any of the company-specific risk be diversified away by investing in both International Investors and Municipal Bond 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 Municipal Bond 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 Municipal Bond Fund, you can compare the effects of market volatilities on International Investors and Municipal Bond 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 Municipal Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Municipal Bond.
Diversification Opportunities for International Investors and Municipal Bond
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Municipal is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Municipal Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Municipal Bond 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 Municipal Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Municipal Bond has no effect on the direction of International Investors i.e., International Investors and Municipal Bond go up and down completely randomly.
Pair Corralation between International Investors and Municipal Bond
Assuming the 90 days horizon International Investors Gold is expected to generate 6.76 times more return on investment than Municipal Bond. However, International Investors is 6.76 times more volatile than Municipal Bond Fund. It trades about 0.04 of its potential returns per unit of risk. Municipal Bond Fund is currently generating about 0.1 per unit of risk. If you would invest 965.00 in International Investors Gold on September 4, 2024 and sell it today you would earn a total of 228.00 from holding International Investors Gold or generate 23.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Investors Gold vs. Municipal Bond Fund
Performance |
| Timeline |
| International Investors |
| Municipal Bond |
International Investors and Municipal Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Municipal Bond
The main advantage of trading using opposite International Investors and Municipal Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors position performs unexpectedly, Municipal Bond 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 Municipal Bond will offset losses from the drop in Municipal Bond's long position.| International Investors vs. Ambrus Core Bond | International Investors vs. The National Tax Free | International Investors vs. California Bond Fund | International Investors vs. T Rowe Price |
| Municipal Bond vs. Artisan Thematic Fund | Municipal Bond vs. Rbb Fund | Municipal Bond vs. Volumetric Fund Volumetric | Municipal Bond vs. Commodities Strategy Fund |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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