Correlation Between Inflation-protected and Metropolitan West
Can any of the company-specific risk be diversified away by investing in both Inflation-protected and Metropolitan West 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 Metropolitan West 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 Metropolitan West Porate, you can compare the effects of market volatilities on Inflation-protected and Metropolitan West 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 Metropolitan West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation-protected and Metropolitan West.
Diversification Opportunities for Inflation-protected and Metropolitan West
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Inflation-protected and Metropolitan is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Protected Bond Fund and Metropolitan West Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West Porate 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 Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West Porate has no effect on the direction of Inflation-protected i.e., Inflation-protected and Metropolitan West go up and down completely randomly.
Pair Corralation between Inflation-protected and Metropolitan West
Assuming the 90 days horizon Inflation-protected is expected to generate 29.76 times less return on investment than Metropolitan West. But when comparing it to its historical volatility, Inflation Protected Bond Fund is 45.55 times less risky than Metropolitan West. It trades about 0.08 of its potential returns per unit of risk. Metropolitan West Porate is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 816.00 in Metropolitan West Porate on August 31, 2024 and sell it today you would earn a total of 3,709 from holding Metropolitan West Porate or generate 454.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Inflation Protected Bond Fund vs. Metropolitan West Porate
Performance |
| Timeline |
| Inflation Protected |
| Metropolitan West Porate |
Inflation-protected and Metropolitan West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflation-protected and Metropolitan West
The main advantage of trading using opposite Inflation-protected and Metropolitan West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation-protected position performs unexpectedly, Metropolitan West 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 Metropolitan West will offset losses from the drop in Metropolitan West's long position.| Inflation-protected vs. Vanguard Inflation Protected Securities | Inflation-protected vs. Vanguard Inflation Protected Securities | Inflation-protected vs. American Funds Inflation |
| Metropolitan West vs. Blrc Sgy Mnp | Metropolitan West vs. Inflation Protected Bond Fund | Metropolitan West vs. Versatile Bond Portfolio | Metropolitan West vs. Legg Mason Partners |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |