Correlation Between Falling Dollar and Us Government
Can any of the company-specific risk be diversified away by investing in both Falling Dollar and Us Government 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 Falling Dollar and Us Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falling Dollar Profund and Us Government Plus, you can compare the effects of market volatilities on Falling Dollar and Us Government 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 Falling Dollar with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falling Dollar and Us Government.
Diversification Opportunities for Falling Dollar and Us Government
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Falling and GVPSX is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Falling Dollar Profund and Us Government Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Plus and Falling Dollar 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 Falling Dollar Profund are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Plus has no effect on the direction of Falling Dollar i.e., Falling Dollar and Us Government go up and down completely randomly.
Pair Corralation between Falling Dollar and Us Government
Assuming the 90 days horizon Falling Dollar Profund is expected to under-perform the Us Government. But the mutual fund apears to be less risky and, when comparing its historical volatility, Falling Dollar Profund is 2.16 times less risky than Us Government. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Us Government Plus is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,928 in Us Government Plus on September 20, 2025 and sell it today you would lose (21.00) from holding Us Government Plus or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falling Dollar Profund vs. Us Government Plus
Performance |
| Timeline |
| Falling Dollar Profund |
| Us Government Plus |
Falling Dollar and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falling Dollar and Us Government
The main advantage of trading using opposite Falling Dollar and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falling Dollar position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Falling Dollar vs. Franklin Emerging Market | Falling Dollar vs. Prudential Emerging Markets | Falling Dollar vs. Blackrock Emerging Markets | Falling Dollar vs. Angel Oak Multi Strategy |
| Us Government vs. Qs Growth Fund | Us Government vs. Growth Allocation Fund | Us Government vs. Ab Centrated Growth | Us Government vs. Qs Growth Fund |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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