Correlation Between Cref Inflation-linked and Abbey Capital
Can any of the company-specific risk be diversified away by investing in both Cref Inflation-linked and Abbey Capital 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 Cref Inflation-linked and Abbey Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Inflation Linked Bond and Abbey Capital Futures, you can compare the effects of market volatilities on Cref Inflation-linked and Abbey Capital 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 Cref Inflation-linked with a short position of Abbey Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Inflation-linked and Abbey Capital.
Diversification Opportunities for Cref Inflation-linked and Abbey Capital
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cref and Abbey is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cref Inflation Linked Bond and Abbey Capital Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbey Capital Futures and Cref Inflation-linked 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 Cref Inflation Linked Bond are associated (or correlated) with Abbey Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbey Capital Futures has no effect on the direction of Cref Inflation-linked i.e., Cref Inflation-linked and Abbey Capital go up and down completely randomly.
Pair Corralation between Cref Inflation-linked and Abbey Capital
Assuming the 90 days trading horizon Cref Inflation-linked is expected to generate 6.7 times less return on investment than Abbey Capital. But when comparing it to its historical volatility, Cref Inflation Linked Bond is 2.24 times less risky than Abbey Capital. It trades about 0.03 of its potential returns per unit of risk. Abbey Capital Futures is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,040 in Abbey Capital Futures on October 26, 2024 and sell it today you would earn a total of 19.00 from holding Abbey Capital Futures or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cref Inflation Linked Bond vs. Abbey Capital Futures
Performance |
| Timeline |
| Cref Inflation Linked |
| Abbey Capital Futures |
Cref Inflation-linked and Abbey Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Inflation-linked and Abbey Capital
The main advantage of trading using opposite Cref Inflation-linked and Abbey Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Inflation-linked position performs unexpectedly, Abbey Capital 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 Abbey Capital will offset losses from the drop in Abbey Capital's long position.| Cref Inflation-linked vs. Vy T Rowe | Cref Inflation-linked vs. Tiaa Cref Lifestyle Servative | Cref Inflation-linked vs. Franklin Servative Allocation | Cref Inflation-linked vs. Allianzgi Diversified Income |
| Abbey Capital vs. Goldman Sachs Technology | Abbey Capital vs. Technology Ultrasector Profund | Abbey Capital vs. Icon Information Technology | Abbey Capital vs. Invesco Technology Fund |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |