Correlation Between College Retirement and Scout Core
Can any of the company-specific risk be diversified away by investing in both College Retirement and Scout Core 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 College Retirement and Scout Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between College Retirement Equities and Scout E Bond, you can compare the effects of market volatilities on College Retirement and Scout Core 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 College Retirement with a short position of Scout Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of College Retirement and Scout Core.
Diversification Opportunities for College Retirement and Scout Core
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between College and Scout is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding College Retirement Equities and Scout E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout E Bond and College Retirement 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 College Retirement Equities are associated (or correlated) with Scout Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout E Bond has no effect on the direction of College Retirement i.e., College Retirement and Scout Core go up and down completely randomly.
Pair Corralation between College Retirement and Scout Core
Assuming the 90 days trading horizon College Retirement Equities is expected to generate 2.15 times more return on investment than Scout Core. However, College Retirement is 2.15 times more volatile than Scout E Bond. It trades about 0.09 of its potential returns per unit of risk. Scout E Bond is currently generating about 0.03 per unit of risk. If you would invest 28,660 in College Retirement Equities on October 18, 2024 and sell it today you would earn a total of 5,630 from holding College Retirement Equities or generate 19.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
College Retirement Equities vs. Scout E Bond
Performance |
| Timeline |
| College Retirement |
| Scout E Bond |
College Retirement and Scout Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with College Retirement and Scout Core
The main advantage of trading using opposite College Retirement and Scout Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if College Retirement position performs unexpectedly, Scout Core 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 Scout Core will offset losses from the drop in Scout Core's long position.| College Retirement vs. Multisector Bond Sma | College Retirement vs. Leader Short Term Bond | College Retirement vs. Nuveen Strategic Municipal | College Retirement vs. Maryland Tax Free Bond |
| Scout Core vs. Putnam Global Financials | Scout Core vs. Transamerica Financial Life | Scout Core vs. Rmb Mendon Financial | Scout Core vs. Fidelity Advisor Financial |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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