Correlation Between Inflation Adjusted and Atac Inflation

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

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

Diversification Opportunities for Inflation Adjusted and Atac Inflation

0.15

Correlation Coefficient

Inflation Adjusted  Atac Inflation

Average diversification

The 3 months correlation between Inflation and Atac is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Adjusted Bond Fund and Atac Inflation Rotation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atac Inflation Rotation and Inflation Adjusted 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 Inflation Adjusted Bond Fund are associated (or correlated) with Atac Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atac Inflation Rotation has no effect on the direction of Inflation Adjusted i.e., Inflation Adjusted and Atac Inflation go up and down completely randomly.

Pair Corralation between Inflation Adjusted and Atac Inflation

Assuming the 90 days horizon Inflation Adjusted Bond Fund is expected to under-perform the Atac Inflation. But the mutual fund apears to be less risky and, when comparing its historical volatility, Inflation Adjusted Bond Fund is 3.54 times less risky than Atac Inflation. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Atac Inflation Rotation is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,265  in Atac Inflation Rotation on February 23, 2025 and sell it today you would earn a total of  184.00  from holding Atac Inflation Rotation or generate 5.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.73%
Values	Daily Returns

Inflation Adjusted Bond Fund  vs.  Atac Inflation Rotation

Inflation Adjusted Bond

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inflation Adjusted Bond Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Inflation Adjusted is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Atac Inflation Rotation

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atac Inflation Rotation are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Atac Inflation is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Inflation Adjusted and Atac Inflation

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

The idea behind Inflation Adjusted Bond Fund and Atac Inflation Rotation 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 Valuation module to check real value of public entities based on technical and fundamental data.