Correlation Between Fixed Income and Alpine Global

Can any of the company-specific risk be diversified away by investing in both Fixed Income and Alpine Global 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 Fixed Income and Alpine Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Fixed Income and Alpine Global Infrastructure, you can compare the effects of market volatilities on Fixed Income and Alpine Global 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 Fixed Income with a short position of Alpine Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fixed Income and Alpine Global.

Diversification Opportunities for Fixed Income and Alpine Global

0.42

Correlation Coefficient

Fixed Income  Alpine Global

Very weak diversification

The 3 months correlation between Fixed and Alpine is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding The Fixed Income and Alpine Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Global Infras and Fixed Income 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 The Fixed Income are associated (or correlated) with Alpine Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Global Infras has no effect on the direction of Fixed Income i.e., Fixed Income and Alpine Global go up and down completely randomly.

Pair Corralation between Fixed Income and Alpine Global

Assuming the 90 days horizon The Fixed Income is expected to under-perform the Alpine Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Fixed Income is 2.27 times less risky than Alpine Global. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Alpine Global Infrastructure is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,202  in Alpine Global Infrastructure on December 25, 2024 and sell it today you would earn a total of  164.00  from holding Alpine Global Infrastructure or generate 7.45% return on investment over 90 days.

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

The Fixed Income  vs.  Alpine Global Infrastructure

Fixed Income

Risk-Adjusted Performance

Very Weak

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

Alpine Global Infras

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alpine Global Infrastructure are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Alpine Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fixed Income and Alpine Global

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

The idea behind The Fixed Income and Alpine Global Infrastructure 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.