Correlation Between Intermediate Term and China Region
Can any of the company-specific risk be diversified away by investing in both Intermediate Term and China Region 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 Intermediate Term and China Region into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Term Tax Free Bond and China Region Fund, you can compare the effects of market volatilities on Intermediate Term and China Region 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 Intermediate Term with a short position of China Region. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Term and China Region.
Diversification Opportunities for Intermediate Term and China Region
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intermediate and China is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Term Tax Free Bon and China Region Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Region and Intermediate Term 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 Intermediate Term Tax Free Bond are associated (or correlated) with China Region. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Region has no effect on the direction of Intermediate Term i.e., Intermediate Term and China Region go up and down completely randomly.
Pair Corralation between Intermediate Term and China Region
If you would invest 1,073 in Intermediate Term Tax Free Bond on September 1, 2024 and sell it today you would earn a total of 11.00 from holding Intermediate Term Tax Free Bond or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Intermediate Term Tax Free Bon vs. China Region Fund
Performance |
| Timeline |
| Intermediate Term Tax |
| China Region |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Intermediate Term and China Region Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Term and China Region
The main advantage of trading using opposite Intermediate Term and China Region positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Term position performs unexpectedly, China Region 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 China Region will offset losses from the drop in China Region's long position.| Intermediate Term vs. Calvert Conservative Allocation | Intermediate Term vs. Adams Diversified Equity | Intermediate Term vs. Lord Abbett Diversified | Intermediate Term vs. Aqr Diversified Arbitrage |
| China Region vs. Mesirow Financial Small | China Region vs. Icon Financial Fund | China Region vs. Davis Financial Fund | China Region vs. Transamerica Financial Life |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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