Correlation Between Intermediate-term and International Investors
Can any of the company-specific risk be diversified away by investing in both Intermediate-term and International Investors 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 International Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Term Bond Fund and International Investors Gold, you can compare the effects of market volatilities on Intermediate-term and International Investors 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 International Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate-term and International Investors.
Diversification Opportunities for Intermediate-term and International Investors
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intermediate-term and INTERNATIONAL is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Term Bond Fund and International Investors Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Investors 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 Bond Fund are associated (or correlated) with International Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Investors has no effect on the direction of Intermediate-term i.e., Intermediate-term and International Investors go up and down completely randomly.
Pair Corralation between Intermediate-term and International Investors
Assuming the 90 days horizon Intermediate Term Bond Fund is expected to generate 0.17 times more return on investment than International Investors. However, Intermediate Term Bond Fund is 5.97 times less risky than International Investors. It trades about 0.06 of its potential returns per unit of risk. International Investors Gold is currently generating about -0.16 per unit of risk. If you would invest 918.00 in Intermediate Term Bond Fund on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Intermediate Term Bond Fund or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Term Bond Fund vs. International Investors Gold
Performance |
| Timeline |
| Intermediate Term Bond |
| International Investors |
Intermediate-term and International Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate-term and International Investors
The main advantage of trading using opposite Intermediate-term and International Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate-term position performs unexpectedly, International Investors 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 International Investors will offset losses from the drop in International Investors' long position.| Intermediate-term vs. International Investors Gold | Intermediate-term vs. Sprott Gold Equity | Intermediate-term vs. Goldman Sachs Esg | Intermediate-term vs. Global Gold 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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