Correlation Between Real Assets and Real Assets

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

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

Diversification Opportunities for Real Assets and Real Assets

1.0

Correlation Coefficient

Real Assets  Real Assets

No risk reduction

The 3 months correlation between Real and Real is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Real Assets Portfolio and Real Assets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Assets Portfolio and Real Assets 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 Real Assets Portfolio are associated (or correlated) with Real Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Assets Portfolio has no effect on the direction of Real Assets i.e., Real Assets and Real Assets go up and down completely randomly.

Pair Corralation between Real Assets and Real Assets

Assuming the 90 days horizon Real Assets Portfolio is expected to generate about the same return on investment as Real Assets Portfolio. But, Real Assets Portfolio is 1.02 times less risky than Real Assets. It trades about 0.1 of its potential returns per unit of risk. Real Assets Portfolio is currently generating about 0.1 per unit of risk. If you would invest  1,063  in Real Assets Portfolio on April 25, 2025 and sell it today you would earn a total of  27.00  from holding Real Assets Portfolio or generate 2.54% return on investment over 90 days.

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

Real Assets Portfolio  vs.  Real Assets Portfolio

Real Assets Portfolio

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Real Assets Portfolio are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Real Assets is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Real Assets Portfolio

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Real Assets Portfolio are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Real Assets is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Real Assets and Real Assets

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

The idea behind Real Assets Portfolio and Real Assets Portfolio 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.