Correlation Between Real Assets and International Fixed

Can any of the company-specific risk be diversified away by investing in both Real Assets and International Fixed 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 International Fixed 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 International Fixed Income, you can compare the effects of market volatilities on Real Assets and International Fixed 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 International Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Assets and International Fixed.

Diversification Opportunities for Real Assets and International Fixed

0.62

Correlation Coefficient

Real Assets  International Fixed

Poor diversification

The 3 months correlation between Real and International is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Real Assets Portfolio and International Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Fixed 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 International Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Fixed has no effect on the direction of Real Assets i.e., Real Assets and International Fixed go up and down completely randomly.

Pair Corralation between Real Assets and International Fixed

Assuming the 90 days horizon Real Assets Portfolio is expected to generate 0.7 times more return on investment than International Fixed. However, Real Assets Portfolio is 1.42 times less risky than International Fixed. It trades about 0.18 of its potential returns per unit of risk. International Fixed Income is currently generating about 0.0 per unit of risk. If you would invest  1,083  in Real Assets Portfolio on June 28, 2025 and sell it today you would earn a total of  7.00  from holding Real Assets Portfolio or generate 0.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	42.86%
Values	Daily Returns

Real Assets Portfolio  vs.  International Fixed Income

Real Assets Portfolio

Risk-Adjusted Performance

Good

Over the last 90 days Real Assets Portfolio has generated negative risk-adjusted returns adding no value to fund investors. 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.

International Fixed

Risk-Adjusted Performance

Weakest

Over the last 90 days International Fixed Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, International Fixed 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 International Fixed

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

The idea behind Real Assets Portfolio and International Fixed Income 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.