Correlation Between Multisector Bond and Active Bond
Can any of the company-specific risk be diversified away by investing in both Multisector Bond 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 Multisector Bond and Active Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and Active Bond Fund, you can compare the effects of market volatilities on Multisector Bond 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 Multisector Bond with a short position of Active Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Active Bond.
Diversification Opportunities for Multisector Bond and Active Bond
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multisector and Active is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma 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 Multisector Bond 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 Multisector Bond Sma 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 Multisector Bond i.e., Multisector Bond and Active Bond go up and down completely randomly.
Pair Corralation between Multisector Bond and Active Bond
Assuming the 90 days horizon Multisector Bond Sma is expected to generate 0.94 times more return on investment than Active Bond. However, Multisector Bond Sma is 1.06 times less risky than Active Bond. It trades about 0.29 of its potential returns per unit of risk. Active Bond Fund is currently generating about 0.2 per unit of risk. If you would invest 1,353 in Multisector Bond Sma on May 21, 2025 and sell it today you would earn a total of 63.00 from holding Multisector Bond Sma or generate 4.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multisector Bond Sma vs. Active Bond Fund
Performance |
| Timeline |
| Multisector Bond Sma |
| Active Bond Fund |
Multisector Bond and Active Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multisector Bond and Active Bond
The main advantage of trading using opposite Multisector Bond and Active Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond 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.| Multisector Bond vs. Small Pany Growth | Multisector Bond vs. Mutual Of America | Multisector Bond vs. Sp Smallcap 600 | Multisector Bond vs. Old Westbury Small |
| Active Bond vs. Small Cap Profund Small Cap | Active Bond vs. Queens Road Small | Active Bond vs. Pace Smallmedium Value | Active Bond vs. Fpa Queens Road |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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