Correlation Between Cref Inflation and K2 Alternative
Can any of the company-specific risk be diversified away by investing in both Cref Inflation and K2 Alternative 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 and K2 Alternative 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 K2 Alternative Strategies, you can compare the effects of market volatilities on Cref Inflation and K2 Alternative 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 with a short position of K2 Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Inflation and K2 Alternative.
Diversification Opportunities for Cref Inflation and K2 Alternative
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cref and FABZX is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cref Inflation Linked Bond and K2 Alternative Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2 Alternative Strategies and Cref Inflation 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 K2 Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2 Alternative Strategies has no effect on the direction of Cref Inflation i.e., Cref Inflation and K2 Alternative go up and down completely randomly.
Pair Corralation between Cref Inflation and K2 Alternative
Assuming the 90 days trading horizon Cref Inflation is expected to generate 1.46 times less return on investment than K2 Alternative. In addition to that, Cref Inflation is 1.36 times more volatile than K2 Alternative Strategies. It trades about 0.07 of its total potential returns per unit of risk. K2 Alternative Strategies is currently generating about 0.14 per unit of volatility. If you would invest 1,077 in K2 Alternative Strategies on September 12, 2024 and sell it today you would earn a total of 145.00 from holding K2 Alternative Strategies or generate 13.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cref Inflation Linked Bond vs. K2 Alternative Strategies
Performance |
| Timeline |
| Cref Inflation Linked |
| K2 Alternative Strategies |
Cref Inflation and K2 Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Inflation and K2 Alternative
The main advantage of trading using opposite Cref Inflation and K2 Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Inflation position performs unexpectedly, K2 Alternative 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 K2 Alternative will offset losses from the drop in K2 Alternative's long position.| Cref Inflation vs. Queens Road Small | Cref Inflation vs. Boston Partners Small | Cref Inflation vs. Valic Company I | Cref Inflation vs. Fpa Queens Road |
| K2 Alternative vs. Cref Money Market | K2 Alternative vs. Ubs Money Series | K2 Alternative vs. John Hancock Money | K2 Alternative vs. Edward Jones Money |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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