Correlation Between Cref Inflation-linked and Balanced Strategy
Can any of the company-specific risk be diversified away by investing in both Cref Inflation-linked and Balanced Strategy 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 Balanced Strategy 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 Balanced Strategy Fund, you can compare the effects of market volatilities on Cref Inflation-linked and Balanced Strategy 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 Balanced Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Inflation-linked and Balanced Strategy.
Diversification Opportunities for Cref Inflation-linked and Balanced Strategy
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cref and Balanced is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Cref Inflation Linked Bond and Balanced Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Strategy 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 Balanced Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Strategy has no effect on the direction of Cref Inflation-linked i.e., Cref Inflation-linked and Balanced Strategy go up and down completely randomly.
Pair Corralation between Cref Inflation-linked and Balanced Strategy
If you would invest 8,492 in Cref Inflation Linked Bond on November 3, 2024 and sell it today you would earn a total of 72.00 from holding Cref Inflation Linked Bond or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Cref Inflation Linked Bond vs. Balanced Strategy Fund
Performance |
| Timeline |
| Cref Inflation Linked |
| Balanced Strategy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Cref Inflation-linked and Balanced Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Inflation-linked and Balanced Strategy
The main advantage of trading using opposite Cref Inflation-linked and Balanced Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Inflation-linked position performs unexpectedly, Balanced Strategy 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 Balanced Strategy will offset losses from the drop in Balanced Strategy's long position.The idea behind Cref Inflation Linked Bond and Balanced Strategy Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Balanced Strategy vs. Short Duration Inflation | Balanced Strategy vs. Guggenheim Managed Futures | Balanced Strategy vs. Simt Multi Asset Inflation | Balanced Strategy vs. Arrow Managed Futures |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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