Correlation Between Real Assets and Global Fixed
Can any of the company-specific risk be diversified away by investing in both Real Assets and Global 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 Global 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 Global Fixed Income, you can compare the effects of market volatilities on Real Assets and Global 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 Global Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Assets and Global Fixed.
Diversification Opportunities for Real Assets and Global Fixed
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Real and Global is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Real Assets Portfolio and Global Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Fixed Income 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 Global Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Fixed Income has no effect on the direction of Real Assets i.e., Real Assets and Global Fixed go up and down completely randomly.
Pair Corralation between Real Assets and Global Fixed
Assuming the 90 days horizon Real Assets Portfolio is expected to generate 3.07 times more return on investment than Global Fixed. However, Real Assets is 3.07 times more volatile than Global Fixed Income. It trades about 0.08 of its potential returns per unit of risk. Global Fixed Income is currently generating about 0.13 per unit of risk. If you would invest 1,055 in Real Assets Portfolio on March 26, 2025 and sell it today you would earn a total of 34.00 from holding Real Assets Portfolio or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Real Assets Portfolio vs. Global Fixed Income
Performance |
| Timeline |
| Real Assets Portfolio |
| Global Fixed Income |
Real Assets and Global Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Assets and Global Fixed
The main advantage of trading using opposite Real Assets and Global Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Assets position performs unexpectedly, Global 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 Global Fixed will offset losses from the drop in Global Fixed's long position.| Real Assets vs. Cref Money Market | Real Assets vs. Putnam Money Market | Real Assets vs. Financial Services Portfolio | Real Assets vs. Vanguard Money Market |
| Global Fixed vs. Ips Strategic Capital | Global Fixed vs. Fabwx | Global Fixed vs. Abs Insights Emerging | Global Fixed vs. T Rowe Price |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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