Correlation Between Balanced Fund and Infrastructure Fund
Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Infrastructure Fund 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 Balanced Fund and Infrastructure Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Institutional and Infrastructure Fund Institutional, you can compare the effects of market volatilities on Balanced Fund and Infrastructure Fund 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 Balanced Fund with a short position of Infrastructure Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Infrastructure Fund.
Diversification Opportunities for Balanced Fund and Infrastructure Fund
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Balanced and Infrastructure is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Institutional and Infrastructure Fund Institutio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrastructure Fund and Balanced Fund 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 Balanced Fund Institutional are associated (or correlated) with Infrastructure Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrastructure Fund has no effect on the direction of Balanced Fund i.e., Balanced Fund and Infrastructure Fund go up and down completely randomly.
Pair Corralation between Balanced Fund and Infrastructure Fund
Assuming the 90 days horizon Balanced Fund Institutional is expected to generate 1.74 times more return on investment than Infrastructure Fund. However, Balanced Fund is 1.74 times more volatile than Infrastructure Fund Institutional. It trades about 0.28 of its potential returns per unit of risk. Infrastructure Fund Institutional is currently generating about 0.24 per unit of risk. If you would invest 1,217 in Balanced Fund Institutional on April 25, 2025 and sell it today you would earn a total of 103.00 from holding Balanced Fund Institutional or generate 8.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Balanced Fund Institutional vs. Infrastructure Fund Institutio
Performance |
Timeline |
Balanced Fund Instit |
Risk-Adjusted Performance
Solid
Weak | Strong |
Infrastructure Fund |
Balanced Fund and Infrastructure Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Balanced Fund and Infrastructure Fund
The main advantage of trading using opposite Balanced Fund and Infrastructure Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund position performs unexpectedly, Infrastructure Fund 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 Infrastructure Fund will offset losses from the drop in Infrastructure Fund's long position.Balanced Fund vs. California Municipal Portfolio | Balanced Fund vs. Federated Ultrashort Bond | Balanced Fund vs. Ab Bond Inflation | Balanced Fund vs. Bbh Intermediate Municipal |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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