Correlation Between Predex Funds and Government Long

Can any of the company-specific risk be diversified away by investing in both Predex Funds and Government Long 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 Predex Funds and Government Long into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Predex Funds and Government Long Bond, you can compare the effects of market volatilities on Predex Funds and Government Long 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 Predex Funds with a short position of Government Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Predex Funds and Government Long.

Diversification Opportunities for Predex Funds and Government Long

0.0

Correlation Coefficient

Predex Funds  Government Long

Pay attention - limited upside

The 3 months correlation between Predex and GOVERNMENT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Predex Funds and Government Long Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Government Long Bond and Predex Funds 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 Predex Funds are associated (or correlated) with Government Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Government Long Bond has no effect on the direction of Predex Funds i.e., Predex Funds and Government Long go up and down completely randomly.

Pair Corralation between Predex Funds and Government Long

If you would invest  10,046  in Government Long Bond on December 22, 2024 and sell it today you would earn a total of  813.00  from holding Government Long Bond or generate 8.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

Predex Funds  vs.  Government Long Bond

Predex Funds

Risk-Adjusted Performance

Very Weak

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

Government Long Bond

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Government Long Bond are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Government Long may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Predex Funds and Government Long

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

The idea behind Predex Funds and Government Long Bond 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.