Correlation Between Global Concentrated and Municipal Bond
Can any of the company-specific risk be diversified away by investing in both Global Concentrated and Municipal Bond 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 Global Concentrated and Municipal Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Centrated Portfolio and Municipal Bond Fund, you can compare the effects of market volatilities on Global Concentrated and Municipal Bond 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 Global Concentrated with a short position of Municipal Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Concentrated and Municipal Bond.
Diversification Opportunities for Global Concentrated and Municipal Bond
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Municipal is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Global Centrated Portfolio and Municipal Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Municipal Bond and Global Concentrated 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 Global Centrated Portfolio are associated (or correlated) with Municipal Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Municipal Bond has no effect on the direction of Global Concentrated i.e., Global Concentrated and Municipal Bond go up and down completely randomly.
Pair Corralation between Global Concentrated and Municipal Bond
Assuming the 90 days horizon Global Centrated Portfolio is expected to generate 4.44 times more return on investment than Municipal Bond. However, Global Concentrated is 4.44 times more volatile than Municipal Bond Fund. It trades about 0.1 of its potential returns per unit of risk. Municipal Bond Fund is currently generating about 0.06 per unit of risk. If you would invest 1,552 in Global Centrated Portfolio on September 3, 2024 and sell it today you would earn a total of 916.00 from holding Global Centrated Portfolio or generate 59.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Centrated Portfolio vs. Municipal Bond Fund
Performance |
| Timeline |
| Global Centrated Por |
| Municipal Bond |
Global Concentrated and Municipal Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Concentrated and Municipal Bond
The main advantage of trading using opposite Global Concentrated and Municipal Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Concentrated position performs unexpectedly, Municipal Bond 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 Municipal Bond will offset losses from the drop in Municipal Bond's long position.| Global Concentrated vs. Kinetics Market Opportunities | Global Concentrated vs. The Hartford Emerging | Global Concentrated vs. Templeton Developing Markets | Global Concentrated vs. Western Assets Emerging |
| Municipal Bond vs. Fidelity Flex Small | Municipal Bond vs. Fidelity Flex International | Municipal Bond vs. Fidelity Flex Mid | Municipal Bond vs. Fidelity Flex 500 |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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