Correlation Between Smallcap Growth and Lifex Inflation
Can any of the company-specific risk be diversified away by investing in both Smallcap Growth and Lifex Inflation 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 Smallcap Growth and Lifex Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Growth Fund and Lifex Inflation Protected Income, you can compare the effects of market volatilities on Smallcap Growth and Lifex Inflation 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 Smallcap Growth with a short position of Lifex Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Growth and Lifex Inflation.
Diversification Opportunities for Smallcap Growth and Lifex Inflation
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Smallcap and Lifex is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Growth Fund and Lifex Inflation Protected Inco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Inflation Prot and Smallcap Growth 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 Smallcap Growth Fund are associated (or correlated) with Lifex Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Inflation Prot has no effect on the direction of Smallcap Growth i.e., Smallcap Growth and Lifex Inflation go up and down completely randomly.
Pair Corralation between Smallcap Growth and Lifex Inflation
Assuming the 90 days horizon Smallcap Growth Fund is expected to generate 2.43 times more return on investment than Lifex Inflation. However, Smallcap Growth is 2.43 times more volatile than Lifex Inflation Protected Income. It trades about 0.05 of its potential returns per unit of risk. Lifex Inflation Protected Income is currently generating about 0.04 per unit of risk. If you would invest 1,392 in Smallcap Growth Fund on September 12, 2024 and sell it today you would earn a total of 304.00 from holding Smallcap Growth Fund or generate 21.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 62.22% |
| Values | Daily Returns |
Smallcap Growth Fund vs. Lifex Inflation Protected Inco
Performance |
| Timeline |
| Smallcap Growth |
| Lifex Inflation Prot |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Smallcap Growth and Lifex Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Growth and Lifex Inflation
The main advantage of trading using opposite Smallcap Growth and Lifex Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Growth position performs unexpectedly, Lifex Inflation 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 Inflation will offset losses from the drop in Lifex Inflation's long position.| Smallcap Growth vs. Allianzgi Diversified Income | Smallcap Growth vs. Global Diversified Income | Smallcap Growth vs. Aqr Diversified Arbitrage | Smallcap Growth vs. Guggenheim Diversified Income |
| Lifex Inflation vs. Smallcap Growth Fund | Lifex Inflation vs. T Rowe Price | Lifex Inflation vs. Pace Smallmedium Growth | Lifex Inflation vs. Eip Growth And |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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