Correlation Between Lifex Inflation-protec and Lifex Income
Can any of the company-specific risk be diversified away by investing in both Lifex Inflation-protec and Lifex Income 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 Lifex Income 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 Lifex Income, you can compare the effects of market volatilities on Lifex Inflation-protec and Lifex Income 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 Lifex Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifex Inflation-protec and Lifex Income.
Diversification Opportunities for Lifex Inflation-protec and Lifex Income
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lifex and Lifex is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lifex Inflation Protected Inco and Lifex Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Income 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 Lifex Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Income has no effect on the direction of Lifex Inflation-protec i.e., Lifex Inflation-protec and Lifex Income go up and down completely randomly.
Pair Corralation between Lifex Inflation-protec and Lifex Income
Assuming the 90 days horizon Lifex Inflation Protected Income is expected to generate 0.56 times more return on investment than Lifex Income. However, Lifex Inflation Protected Income is 1.8 times less risky than Lifex Income. It trades about 0.06 of its potential returns per unit of risk. Lifex Income is currently generating about 0.0 per unit of risk. If you would invest 1,890 in Lifex Inflation Protected Income on September 1, 2024 and sell it today you would earn a total of 103.00 from holding Lifex Inflation Protected Income or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.05% |
| Values | Daily Returns |
Lifex Inflation Protected Inco vs. Lifex Income
Performance |
| Timeline |
| Lifex Inflation-protec |
| Lifex Income |
Lifex Inflation-protec and Lifex Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifex Inflation-protec and Lifex Income
The main advantage of trading using opposite Lifex Inflation-protec and Lifex Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifex Inflation-protec position performs unexpectedly, Lifex Income 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 Lifex Income will offset losses from the drop in Lifex Income's long position.| Lifex Inflation-protec vs. Ultra Short Fixed Income | Lifex Inflation-protec vs. Sarofim Equity | Lifex Inflation-protec vs. Small Cap Equity | Lifex Inflation-protec vs. Ms Global Fixed |
| Lifex Income vs. Thrivent Income Fund | Lifex Income vs. Maryland Tax Free Bond | Lifex Income vs. T Rowe Price | Lifex Income vs. Ab Global Bond |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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