Correlation Between Cref Money and Iaadx
Can any of the company-specific risk be diversified away by investing in both Cref Money and Iaadx 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 Iaadx 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 Iaadx, you can compare the effects of market volatilities on Cref Money and Iaadx 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 Iaadx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and Iaadx.
Diversification Opportunities for Cref Money and Iaadx
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cref and Iaadx is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market and Iaadx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iaadx 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 Iaadx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iaadx has no effect on the direction of Cref Money i.e., Cref Money and Iaadx go up and down completely randomly.
Pair Corralation between Cref Money and Iaadx
Assuming the 90 days trading horizon Cref Money Market is expected to generate 0.07 times more return on investment than Iaadx. However, Cref Money Market is 13.4 times less risky than Iaadx. It trades about 1.04 of its potential returns per unit of risk. Iaadx is currently generating about 0.07 per unit of risk. If you would invest 2,939 in Cref Money Market on December 5, 2024 and sell it today you would earn a total of 66.00 from holding Cref Money Market or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Cref Money Market vs. Iaadx
Performance |
| Timeline |
| Cref Money Market |
| Iaadx |
Cref Money and Iaadx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Money and Iaadx
The main advantage of trading using opposite Cref Money and Iaadx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money position performs unexpectedly, Iaadx 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 Iaadx will offset losses from the drop in Iaadx's long position.| Cref Money vs. John Hancock Variable | Cref Money vs. Siit Ultra Short | Cref Money vs. T Rowe Price | Cref Money vs. Virtus Multi Sector Short |
| Iaadx vs. Schwab Treasury Inflation | Iaadx vs. Nationwide Inflation Protected Securities | Iaadx vs. Credit Suisse Multialternative | Iaadx vs. Inflation Linked Fixed Income |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |