Correlation Between Atac Inflation and The Bond

Can any of the company-specific risk be diversified away by investing in both Atac Inflation and The Bond 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 Atac Inflation and The Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atac Inflation Rotation and The Bond Fund, you can compare the effects of market volatilities on Atac Inflation and The Bond 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 Atac Inflation with a short position of The Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atac Inflation and The Bond.

Diversification Opportunities for Atac Inflation and The Bond

0.28

Correlation Coefficient

Atac Inflation  The Bond

Modest diversification

The 3 months correlation between Atac and The is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Atac Inflation Rotation and The Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund and Atac Inflation 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 Atac Inflation Rotation are associated (or correlated) with The Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bond Fund has no effect on the direction of Atac Inflation i.e., Atac Inflation and The Bond go up and down completely randomly.

Pair Corralation between Atac Inflation and The Bond

Assuming the 90 days horizon Atac Inflation Rotation is expected to under-perform the The Bond. In addition to that, Atac Inflation is 3.49 times more volatile than The Bond Fund. It trades about -0.37 of its total potential returns per unit of risk. The Bond Fund is currently generating about -0.42 per unit of volatility. If you would invest  1,801  in The Bond Fund on October 5, 2024 and sell it today you would lose (41.00) from holding The Bond Fund or give up 2.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Atac Inflation Rotation  vs.  The Bond Fund

Atac Inflation Rotation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atac Inflation Rotation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Atac Inflation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bond Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Bond Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, The Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Atac Inflation and The Bond

The main advantage of trading using opposite Atac Inflation and The Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atac Inflation position performs unexpectedly, The Bond 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 The Bond will offset losses from the drop in The Bond's long position.

The idea behind Atac Inflation Rotation and The Bond Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.