Correlation Between California Bond and Ab Government
Can any of the company-specific risk be diversified away by investing in both California Bond and Ab Government 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 California Bond and Ab Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Ab Government Exchange, you can compare the effects of market volatilities on California Bond and Ab Government 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 California Bond with a short position of Ab Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Ab Government.
Diversification Opportunities for California Bond and Ab Government
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between California and AEAXX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and Ab Government Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Government Exchange and California 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 California Bond Fund are associated (or correlated) with Ab Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Government Exchange has no effect on the direction of California Bond i.e., California Bond and Ab Government go up and down completely randomly.
Pair Corralation between California Bond and Ab Government
If you would invest 1,017 in California Bond Fund on December 11, 2024 and sell it today you would earn a total of 16.00 from holding California Bond Fund or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
California Bond Fund vs. Ab Government Exchange
Performance |
| Timeline |
| California Bond |
| Ab Government Exchange |
California Bond and Ab Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Ab Government
The main advantage of trading using opposite California Bond and Ab Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond position performs unexpectedly, Ab Government 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 Ab Government will offset losses from the drop in Ab Government's long position.| California Bond vs. Transamerica International Small | California Bond vs. Glg Intl Small | California Bond vs. Cardinal Small Cap | California Bond vs. Kinetics Small Cap |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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