Correlation Between Cref Inflation and Americafirst Large
Can any of the company-specific risk be diversified away by investing in both Cref Inflation and Americafirst Large 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 Americafirst Large 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 Americafirst Large Cap, you can compare the effects of market volatilities on Cref Inflation and Americafirst Large 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 Americafirst Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Inflation and Americafirst Large.
Diversification Opportunities for Cref Inflation and Americafirst Large
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cref and Americafirst is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cref Inflation Linked Bond and Americafirst Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Large Cap 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 Americafirst Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Large Cap has no effect on the direction of Cref Inflation i.e., Cref Inflation and Americafirst Large go up and down completely randomly.
Pair Corralation between Cref Inflation and Americafirst Large
Assuming the 90 days trading horizon Cref Inflation Linked Bond is expected to generate 0.11 times more return on investment than Americafirst Large. However, Cref Inflation Linked Bond is 9.5 times less risky than Americafirst Large. It trades about -0.16 of its potential returns per unit of risk. Americafirst Large Cap is currently generating about -0.11 per unit of risk. If you would invest 8,524 in Cref Inflation Linked Bond on October 17, 2024 and sell it today you would lose (49.00) from holding Cref Inflation Linked Bond or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cref Inflation Linked Bond vs. Americafirst Large Cap
Performance |
| Timeline |
| Cref Inflation Linked |
| Americafirst Large Cap |
Cref Inflation and Americafirst Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Inflation and Americafirst Large
The main advantage of trading using opposite Cref Inflation and Americafirst Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Inflation position performs unexpectedly, Americafirst Large 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 Americafirst Large will offset losses from the drop in Americafirst Large's long position.| Cref Inflation vs. Georgia Tax Free Bond | Cref Inflation vs. Artisan High Income | Cref Inflation vs. Blrc Sgy Mnp | Cref Inflation vs. Ab Bond Inflation |
| Americafirst Large vs. Cref Inflation Linked Bond | Americafirst Large vs. Tiaa Cref Inflation Link | Americafirst Large vs. Ab Bond Inflation | Americafirst Large vs. Short Duration Inflation |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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