Correlation Between Income Growth and Inflation-adjusted
Can any of the company-specific risk be diversified away by investing in both Income Growth and Inflation-adjusted 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 Income Growth and Inflation-adjusted into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Income Growth Fund and Inflation Adjusted Bond Fund, you can compare the effects of market volatilities on Income Growth and Inflation-adjusted 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 Income Growth with a short position of Inflation-adjusted. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Growth and Inflation-adjusted.
Diversification Opportunities for Income Growth and Inflation-adjusted
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Income and Inflation-adjusted is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Income Growth Fund and Inflation Adjusted Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Adjusted Bond and Income Growth 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 Income Growth Fund are associated (or correlated) with Inflation-adjusted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Adjusted Bond has no effect on the direction of Income Growth i.e., Income Growth and Inflation-adjusted go up and down completely randomly.
Pair Corralation between Income Growth and Inflation-adjusted
Assuming the 90 days horizon Income Growth Fund is expected to generate 2.54 times more return on investment than Inflation-adjusted. However, Income Growth is 2.54 times more volatile than Inflation Adjusted Bond Fund. It trades about 0.22 of its potential returns per unit of risk. Inflation Adjusted Bond Fund is currently generating about -0.03 per unit of risk. If you would invest 3,591 in Income Growth Fund on September 6, 2024 and sell it today you would earn a total of 330.00 from holding Income Growth Fund or generate 9.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Income Growth Fund vs. Inflation Adjusted Bond Fund
Performance |
Timeline |
Income Growth |
Inflation Adjusted Bond |
Income Growth and Inflation-adjusted Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Income Growth and Inflation-adjusted
The main advantage of trading using opposite Income Growth and Inflation-adjusted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Growth position performs unexpectedly, Inflation-adjusted 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 Inflation-adjusted will offset losses from the drop in Inflation-adjusted's long position.Income Growth vs. Mid Cap Value | Income Growth vs. Equity Growth Fund | Income Growth vs. Diversified Bond Fund | Income Growth vs. Emerging Markets Fund |
Inflation-adjusted vs. Transamerica Funds | Inflation-adjusted vs. Artisan High Income | Inflation-adjusted vs. Limited Term Tax | Inflation-adjusted vs. Maryland Tax Free Bond |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume |