Correlation Between California Bond and Lifex Inflation
Can any of the company-specific risk be diversified away by investing in both California Bond and Lifex Inflation 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 Lifex Inflation 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 Lifex Inflation Protected Income, you can compare the effects of market volatilities on California Bond and Lifex Inflation 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 Lifex Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Lifex Inflation.
Diversification Opportunities for California Bond and Lifex Inflation
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between California and Lifex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and Lifex Inflation Protected Inco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Inflation Prot 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 Lifex Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Inflation Prot has no effect on the direction of California Bond i.e., California Bond and Lifex Inflation go up and down completely randomly.
Pair Corralation between California Bond and Lifex Inflation
If you would invest 1,028 in California Bond Fund on November 28, 2024 and sell it today you would earn a total of 10.00 from holding California Bond Fund or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
California Bond Fund vs. Lifex Inflation Protected Inco
Performance |
| Timeline |
| California Bond |
| Lifex Inflation Prot |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
California Bond and Lifex Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Lifex Inflation
The main advantage of trading using opposite California Bond and Lifex Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond position performs unexpectedly, Lifex Inflation 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 Lifex Inflation will offset losses from the drop in Lifex Inflation's long position.| California Bond vs. Vy Blackrock Inflation | California Bond vs. Simt Multi Asset Inflation | California Bond vs. Credit Suisse Multialternative | California Bond vs. Ab Bond Inflation |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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