Correlation Between California Bond and International Investors
Can any of the company-specific risk be diversified away by investing in both California Bond 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 California Bond and International Investors 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 International Investors Gold, you can compare the effects of market volatilities on California Bond 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 California Bond with a short position of International Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and International Investors.
Diversification Opportunities for California Bond and International Investors
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between California and International is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding California 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 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 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 California Bond i.e., California Bond and International Investors go up and down completely randomly.
Pair Corralation between California Bond and International Investors
Assuming the 90 days horizon California Bond is expected to generate 2.83 times less return on investment than International Investors. But when comparing it to its historical volatility, California Bond Fund is 16.01 times less risky than International Investors. It trades about 0.58 of its potential returns per unit of risk. International Investors Gold is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,181 in International Investors Gold on September 12, 2024 and sell it today you would earn a total of 39.00 from holding International Investors Gold or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Bond Fund vs. International Investors Gold
Performance |
| Timeline |
| California Bond |
| International Investors |
California Bond and International Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and International Investors
The main advantage of trading using opposite California Bond and International Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond 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.| California Bond vs. Vanguard California Long Term | California Bond vs. Vanguard California Long Term | California Bond vs. SCOR PK | California Bond vs. Morningstar Unconstrained Allocation |
| International Investors vs. Washington Mutual Investors | International Investors vs. Alternative Asset Allocation | International Investors vs. T Rowe Price | International Investors vs. Dodge Cox Stock |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |