Correlation Between Us Government and Cref Money
Can any of the company-specific risk be diversified away by investing in both Us Government and Cref Money 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 Us Government and Cref Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Cref Money Market, you can compare the effects of market volatilities on Us Government and Cref Money 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 Us Government with a short position of Cref Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Cref Money.
Diversification Opportunities for Us Government and Cref Money
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between USGFX and Cref is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities and Cref Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Money Market and Us Government 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 Us Government Securities are associated (or correlated) with Cref Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Money Market has no effect on the direction of Us Government i.e., Us Government and Cref Money go up and down completely randomly.
Pair Corralation between Us Government and Cref Money
Assuming the 90 days horizon Us Government is expected to generate 2.06 times less return on investment than Cref Money. In addition to that, Us Government is 17.43 times more volatile than Cref Money Market. It trades about 0.02 of its total potential returns per unit of risk. Cref Money Market is currently generating about 0.8 per unit of volatility. If you would invest 2,700 in Cref Money Market on September 12, 2024 and sell it today you would earn a total of 275.00 from holding Cref Money Market or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.17% |
| Values | Daily Returns |
Us Government Securities vs. Cref Money Market
Performance |
| Timeline |
| Us Government Securities |
| Cref Money Market |
Us Government and Cref Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Cref Money
The main advantage of trading using opposite Us Government and Cref Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government position performs unexpectedly, Cref Money 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 Cref Money will offset losses from the drop in Cref Money's long position.| Us Government vs. Vanguard Gnma Fund | Us Government vs. Vanguard Intermediate Term Government | Us Government vs. Us Government Securities | Us Government vs. Us Government Securities |
| Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard 500 Index | Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard Total 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |