Correlation Between Growth Allocation and Active Bond
Can any of the company-specific risk be diversified away by investing in both Growth Allocation and Active Bond 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 Growth Allocation and Active Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Allocation Fund and Active Bond Fund, you can compare the effects of market volatilities on Growth Allocation and Active Bond 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 Growth Allocation with a short position of Active Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Allocation and Active Bond.
Diversification Opportunities for Growth Allocation and Active Bond
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GROWTH and Active is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Growth Allocation Fund and Active Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Active Bond Fund and Growth Allocation 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 Growth Allocation Fund are associated (or correlated) with Active Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Active Bond Fund has no effect on the direction of Growth Allocation i.e., Growth Allocation and Active Bond go up and down completely randomly.
Pair Corralation between Growth Allocation and Active Bond
If you would invest 1,363 in Growth Allocation Fund on June 2, 2025 and sell it today you would earn a total of 42.00 from holding Growth Allocation Fund or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Growth Allocation Fund vs. Active Bond Fund
Performance |
| Timeline |
| Growth Allocation |
| Active Bond Fund |
Risk-Adjusted Performance
Weakest
Weak | Strong |
Growth Allocation and Active Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Allocation and Active Bond
The main advantage of trading using opposite Growth Allocation and Active Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Allocation position performs unexpectedly, Active Bond 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 Active Bond will offset losses from the drop in Active Bond's long position.| Growth Allocation vs. Defensive Market Strategies | Growth Allocation vs. Defensive Market Strategies | Growth Allocation vs. Value Equity Institutional | Growth Allocation vs. Value Equity Investor |
| Active Bond vs. Strategic Advisers Income | Active Bond vs. Federated High Yield | Active Bond vs. Jpmorgan High Yield | Active Bond vs. Dunham High Yield |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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