Correlation Between Thompson Bond and Community Reinvestment
Can any of the company-specific risk be diversified away by investing in both Thompson Bond and Community Reinvestment 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 Thompson Bond and Community Reinvestment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thompson Bond Fund and Community Reinvestment Act, you can compare the effects of market volatilities on Thompson Bond and Community Reinvestment 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 Thompson Bond with a short position of Community Reinvestment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thompson Bond and Community Reinvestment.
Diversification Opportunities for Thompson Bond and Community Reinvestment
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thompson and Community is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Thompson Bond Fund and Community Reinvestment Act in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Reinvestment and Thompson Bond 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 Thompson Bond Fund are associated (or correlated) with Community Reinvestment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Reinvestment has no effect on the direction of Thompson Bond i.e., Thompson Bond and Community Reinvestment go up and down completely randomly.
Pair Corralation between Thompson Bond and Community Reinvestment
Assuming the 90 days horizon Thompson Bond Fund is expected to generate 0.47 times more return on investment than Community Reinvestment. However, Thompson Bond Fund is 2.12 times less risky than Community Reinvestment. It trades about 0.31 of its potential returns per unit of risk. Community Reinvestment Act is currently generating about 0.04 per unit of risk. If you would invest 1,036 in Thompson Bond Fund on November 27, 2024 and sell it today you would earn a total of 21.00 from holding Thompson Bond Fund or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thompson Bond Fund vs. Community Reinvestment Act
Performance |
| Timeline |
| Thompson Bond |
| Community Reinvestment |
Thompson Bond and Community Reinvestment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thompson Bond and Community Reinvestment
The main advantage of trading using opposite Thompson Bond and Community Reinvestment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thompson Bond position performs unexpectedly, Community Reinvestment 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 Community Reinvestment will offset losses from the drop in Community Reinvestment's long position.| Thompson Bond vs. Tcw Total Return | Thompson Bond vs. Amg Yacktman Focused | Thompson Bond vs. Fidelity Advisor Floating | Thompson Bond vs. Doubleline Total Return |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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