Correlation Between Inflation-protected and Aquila Tax-free
Can any of the company-specific risk be diversified away by investing in both Inflation-protected and Aquila Tax-free 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 Aquila Tax-free 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 Aquila Tax Free Trust, you can compare the effects of market volatilities on Inflation-protected and Aquila Tax-free 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 Aquila Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation-protected and Aquila Tax-free.
Diversification Opportunities for Inflation-protected and Aquila Tax-free
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Inflation-protected and Aquila is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Protected Bond Fund and Aquila Tax Free Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Tax Free 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 Aquila Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Tax Free has no effect on the direction of Inflation-protected i.e., Inflation-protected and Aquila Tax-free go up and down completely randomly.
Pair Corralation between Inflation-protected and Aquila Tax-free
Assuming the 90 days horizon Inflation Protected Bond Fund is expected to generate 3.31 times more return on investment than Aquila Tax-free. However, Inflation-protected is 3.31 times more volatile than Aquila Tax Free Trust. It trades about 0.12 of its potential returns per unit of risk. Aquila Tax Free Trust is currently generating about 0.17 per unit of risk. If you would invest 887.00 in Inflation Protected Bond Fund on September 4, 2024 and sell it today you would earn a total of 147.00 from holding Inflation Protected Bond Fund or generate 16.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 67.82% |
| Values | Daily Returns |
Inflation Protected Bond Fund vs. Aquila Tax Free Trust
Performance |
| Timeline |
| Inflation Protected |
| Aquila Tax Free |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Inflation-protected and Aquila Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflation-protected and Aquila Tax-free
The main advantage of trading using opposite Inflation-protected and Aquila Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation-protected position performs unexpectedly, Aquila Tax-free 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 Aquila Tax-free will offset losses from the drop in Aquila Tax-free's long position.| Inflation-protected vs. Wells Fargo Advantage | Inflation-protected vs. Wells Fargo Ultra | Inflation-protected vs. Wells Fargo Ultra | Inflation-protected vs. Wells Fargo Emerging |
| Aquila Tax-free vs. Dunham Porategovernment Bond | Aquila Tax-free vs. Fidelity Series Government | Aquila Tax-free vs. Prudential Government Income | Aquila Tax-free vs. Government Securities 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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