Correlation Between Strategic Asset and Inflation Protection
Can any of the company-specific risk be diversified away by investing in both Strategic Asset and Inflation Protection 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 Strategic Asset and Inflation Protection into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Asset Management and Inflation Protection Fund, you can compare the effects of market volatilities on Strategic Asset and Inflation Protection 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 Strategic Asset with a short position of Inflation Protection. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Asset and Inflation Protection.
Diversification Opportunities for Strategic Asset and Inflation Protection
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strategic and Inflation is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Asset Management and Inflation Protection Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protection and Strategic Asset 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 Strategic Asset Management are associated (or correlated) with Inflation Protection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protection has no effect on the direction of Strategic Asset i.e., Strategic Asset and Inflation Protection go up and down completely randomly.
Pair Corralation between Strategic Asset and Inflation Protection
Assuming the 90 days horizon Strategic Asset Management is expected to generate 0.95 times more return on investment than Inflation Protection. However, Strategic Asset Management is 1.05 times less risky than Inflation Protection. It trades about 0.32 of its potential returns per unit of risk. Inflation Protection Fund is currently generating about 0.08 per unit of risk. If you would invest 1,209 in Strategic Asset Management on September 1, 2024 and sell it today you would earn a total of 24.00 from holding Strategic Asset Management or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Asset Management vs. Inflation Protection Fund
Performance |
| Timeline |
| Strategic Asset Mana |
| Inflation Protection |
Strategic Asset and Inflation Protection Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Asset and Inflation Protection
The main advantage of trading using opposite Strategic Asset and Inflation Protection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Asset position performs unexpectedly, Inflation Protection 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 Inflation Protection will offset losses from the drop in Inflation Protection's long position.| Strategic Asset vs. Jhancock Disciplined Value | Strategic Asset vs. Dunham Large Cap | Strategic Asset vs. Fidelity Series 1000 | Strategic Asset vs. Aqr Large Cap |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |