Correlation Between Commodities Strategy and Cref Inflation
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy and Cref Inflation 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 Commodities Strategy and Cref Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Cref Inflation Linked Bond, you can compare the effects of market volatilities on Commodities Strategy and Cref Inflation 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 Commodities Strategy with a short position of Cref Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Cref Inflation.
Diversification Opportunities for Commodities Strategy and Cref Inflation
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Commodities and Cref is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Cref Inflation Linked Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Inflation Linked and Commodities Strategy 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 Commodities Strategy Fund are associated (or correlated) with Cref Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Inflation Linked has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Cref Inflation go up and down completely randomly.
Pair Corralation between Commodities Strategy and Cref Inflation
Assuming the 90 days horizon Commodities Strategy is expected to generate 1.53 times less return on investment than Cref Inflation. In addition to that, Commodities Strategy is 4.5 times more volatile than Cref Inflation Linked Bond. It trades about 0.01 of its total potential returns per unit of risk. Cref Inflation Linked Bond is currently generating about 0.05 per unit of volatility. If you would invest 7,950 in Cref Inflation Linked Bond on October 14, 2024 and sell it today you would earn a total of 515.00 from holding Cref Inflation Linked Bond or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Cref Inflation Linked Bond
Performance |
| Timeline |
| Commodities Strategy |
| Cref Inflation Linked |
Commodities Strategy and Cref Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Cref Inflation
The main advantage of trading using opposite Commodities Strategy and Cref Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy position performs unexpectedly, Cref Inflation 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 Cref Inflation will offset losses from the drop in Cref Inflation's long position.| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Real Estate Fund |
| Cref Inflation vs. Predex Funds | Cref Inflation vs. Tax Managed Large Cap | Cref Inflation vs. Rbb Fund | Cref Inflation vs. Commodities Strategy Fund |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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