Correlation Between Inflation-protected and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Inflation-protected and Arrow Managed 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 Inflation-protected and Arrow Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflation Protected Bond Fund and Arrow Managed Futures, you can compare the effects of market volatilities on Inflation-protected and Arrow Managed 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 Inflation-protected with a short position of Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation-protected and Arrow Managed.
Diversification Opportunities for Inflation-protected and Arrow Managed
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Inflation-protected and Arrow is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Protected Bond Fund and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures and Inflation-protected 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 Inflation Protected Bond Fund are associated (or correlated) with Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Inflation-protected i.e., Inflation-protected and Arrow Managed go up and down completely randomly.
Pair Corralation between Inflation-protected and Arrow Managed
Assuming the 90 days horizon Inflation Protected Bond Fund is expected to generate 0.28 times more return on investment than Arrow Managed. However, Inflation Protected Bond Fund is 3.55 times less risky than Arrow Managed. It trades about 0.06 of its potential returns per unit of risk. Arrow Managed Futures is currently generating about 0.01 per unit of risk. If you would invest 914.00 in Inflation Protected Bond Fund on October 27, 2024 and sell it today you would earn a total of 119.00 from holding Inflation Protected Bond Fund or generate 13.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflation Protected Bond Fund vs. Arrow Managed Futures
Performance |
| Timeline |
| Inflation Protected |
| Arrow Managed Futures |
Inflation-protected and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflation-protected and Arrow Managed
The main advantage of trading using opposite Inflation-protected and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation-protected position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed's long position.| Inflation-protected vs. Jpmorgan Diversified Fund | Inflation-protected vs. Tax Managed Mid Small | Inflation-protected vs. Madison Diversified Income | Inflation-protected vs. Wells Fargo Diversified |
| Arrow Managed vs. Us Vector Equity | Arrow Managed vs. Greenspring Fund Retail | Arrow Managed vs. Gmo Global Equity | Arrow Managed vs. Enhanced Fixed Income |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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