Correlation Between Cref Inflation-linked and Deutsche Gnma
Can any of the company-specific risk be diversified away by investing in both Cref Inflation-linked and Deutsche Gnma 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 Deutsche Gnma 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 Deutsche Gnma Fund, you can compare the effects of market volatilities on Cref Inflation-linked and Deutsche Gnma 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 Deutsche Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Inflation-linked and Deutsche Gnma.
Diversification Opportunities for Cref Inflation-linked and Deutsche Gnma
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cref and Deutsche is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cref Inflation Linked Bond and Deutsche Gnma Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Gnma 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 Deutsche Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Gnma has no effect on the direction of Cref Inflation-linked i.e., Cref Inflation-linked and Deutsche Gnma go up and down completely randomly.
Pair Corralation between Cref Inflation-linked and Deutsche Gnma
Assuming the 90 days trading horizon Cref Inflation Linked Bond is expected to generate 0.47 times more return on investment than Deutsche Gnma. However, Cref Inflation Linked Bond is 2.14 times less risky than Deutsche Gnma. It trades about 0.03 of its potential returns per unit of risk. Deutsche Gnma Fund is currently generating about -0.02 per unit of risk. If you would invest 8,502 in Cref Inflation Linked Bond on October 26, 2024 and sell it today you would earn a total of 23.00 from holding Cref Inflation Linked Bond or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cref Inflation Linked Bond vs. Deutsche Gnma Fund
Performance |
| Timeline |
| Cref Inflation Linked |
| Deutsche Gnma |
Cref Inflation-linked and Deutsche Gnma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Inflation-linked and Deutsche Gnma
The main advantage of trading using opposite Cref Inflation-linked and Deutsche Gnma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Inflation-linked position performs unexpectedly, Deutsche Gnma 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 Deutsche Gnma will offset losses from the drop in Deutsche Gnma'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 |
| Deutsche Gnma vs. Virtus Seix Government | Deutsche Gnma vs. T Rowe Price | Deutsche Gnma vs. Prudential California Muni | Deutsche Gnma vs. Blrc Sgy Mnp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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