Correlation Between Lifex Inflation-protec and Six Circles
Can any of the company-specific risk be diversified away by investing in both Lifex Inflation-protec and Six Circles 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 Lifex Inflation-protec and Six Circles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifex Inflation Protected Income and Six Circles Tax, you can compare the effects of market volatilities on Lifex Inflation-protec and Six Circles 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 Lifex Inflation-protec with a short position of Six Circles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifex Inflation-protec and Six Circles.
Diversification Opportunities for Lifex Inflation-protec and Six Circles
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lifex and Six is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lifex Inflation Protected Inco and Six Circles Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Circles Tax and Lifex Inflation-protec 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 Lifex Inflation Protected Income are associated (or correlated) with Six Circles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Circles Tax has no effect on the direction of Lifex Inflation-protec i.e., Lifex Inflation-protec and Six Circles go up and down completely randomly.
Pair Corralation between Lifex Inflation-protec and Six Circles
Assuming the 90 days horizon Lifex Inflation Protected Income is expected to generate 7.36 times more return on investment than Six Circles. However, Lifex Inflation-protec is 7.36 times more volatile than Six Circles Tax. It trades about 0.07 of its potential returns per unit of risk. Six Circles Tax is currently generating about 0.34 per unit of risk. If you would invest 1,569 in Lifex Inflation Protected Income on August 31, 2024 and sell it today you would earn a total of 80.00 from holding Lifex Inflation Protected Income or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 58.71% |
| Values | Daily Returns |
Lifex Inflation Protected Inco vs. Six Circles Tax
Performance |
| Timeline |
| Lifex Inflation-protec |
| Six Circles Tax |
Lifex Inflation-protec and Six Circles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifex Inflation-protec and Six Circles
The main advantage of trading using opposite Lifex Inflation-protec and Six Circles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifex Inflation-protec position performs unexpectedly, Six Circles 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 Six Circles will offset losses from the drop in Six Circles' long position.| Lifex Inflation-protec vs. Aqr Managed Futures | Lifex Inflation-protec vs. Ab Bond Inflation | Lifex Inflation-protec vs. Arrow Managed Futures | Lifex Inflation-protec vs. Ab Bond Inflation |
| Six Circles vs. Six Circles Ultra | Six Circles vs. Six Circles Unconstrained | Six Circles vs. Six Circles Managed | Six Circles vs. Six Circles Managed |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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