Correlation Between Cref Money and 1290 Funds
Can any of the company-specific risk be diversified away by investing in both Cref Money and 1290 Funds 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 Money and 1290 Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Money Market and 1290 Funds , you can compare the effects of market volatilities on Cref Money and 1290 Funds 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 Money with a short position of 1290 Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and 1290 Funds.
Diversification Opportunities for Cref Money and 1290 Funds
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cref and 1290 is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market and 1290 Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1290 Funds and Cref Money 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 Money Market are associated (or correlated) with 1290 Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1290 Funds has no effect on the direction of Cref Money i.e., Cref Money and 1290 Funds go up and down completely randomly.
Pair Corralation between Cref Money and 1290 Funds
Assuming the 90 days trading horizon Cref Money is expected to generate 9.44 times less return on investment than 1290 Funds. But when comparing it to its historical volatility, Cref Money Market is 71.69 times less risky than 1290 Funds. It trades about 1.02 of its potential returns per unit of risk. 1290 Funds is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,323 in 1290 Funds on September 13, 2024 and sell it today you would earn a total of 47.00 from holding 1290 Funds or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cref Money Market vs. 1290 Funds
Performance |
| Timeline |
| Cref Money Market |
| 1290 Funds |
Cref Money and 1290 Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Money and 1290 Funds
The main advantage of trading using opposite Cref Money and 1290 Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money position performs unexpectedly, 1290 Funds 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 1290 Funds will offset losses from the drop in 1290 Funds' long position.| Cref Money vs. Davis Financial Fund | Cref Money vs. Blackrock Financial Institutions | Cref Money vs. Transamerica Financial Life | Cref Money vs. Mesirow Financial Small |
| 1290 Funds vs. 1290 Funds | 1290 Funds vs. 1290 Smartbeta Equity | 1290 Funds vs. 1290 Smartbeta Equity | 1290 Funds vs. 1290 Smartbeta Equity |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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