Correlation Between Global Diversified and Cref Money
Can any of the company-specific risk be diversified away by investing in both Global Diversified and Cref Money 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 Diversified and Cref Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Diversified Income and Cref Money Market, you can compare the effects of market volatilities on Global Diversified and Cref Money 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 Diversified with a short position of Cref Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Diversified and Cref Money.
Diversification Opportunities for Global Diversified and Cref Money
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Cref is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Global Diversified Income and Cref Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Money Market and Global Diversified 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 Diversified Income are associated (or correlated) with Cref Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Money Market has no effect on the direction of Global Diversified i.e., Global Diversified and Cref Money go up and down completely randomly.
Pair Corralation between Global Diversified and Cref Money
Assuming the 90 days horizon Global Diversified Income is expected to generate 9.39 times more return on investment than Cref Money. However, Global Diversified is 9.39 times more volatile than Cref Money Market. It trades about 0.11 of its potential returns per unit of risk. Cref Money Market is currently generating about 0.96 per unit of risk. If you would invest 1,124 in Global Diversified Income on October 20, 2024 and sell it today you would earn a total of 62.00 from holding Global Diversified Income or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Diversified Income vs. Cref Money Market
Performance |
| Timeline |
| Global Diversified Income |
| Cref Money Market |
Global Diversified and Cref Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Diversified and Cref Money
The main advantage of trading using opposite Global Diversified and Cref Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Diversified position performs unexpectedly, Cref Money 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 Cref Money will offset losses from the drop in Cref Money's long position.The idea behind Global Diversified Income and Cref Money Market pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Cref Money vs. Delaware Limited Term Diversified | Cref Money vs. Allianzgi Diversified Income | Cref Money vs. Global Diversified Income | Cref Money vs. Fulcrum Diversified Absolute |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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