Correlation Between Real Assets and Commonwealth Global
Can any of the company-specific risk be diversified away by investing in both Real Assets and Commonwealth Global 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 Commonwealth Global 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 Commonwealth Global Fund, you can compare the effects of market volatilities on Real Assets and Commonwealth Global 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 Commonwealth Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Assets and Commonwealth Global.
Diversification Opportunities for Real Assets and Commonwealth Global
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Real and Commonwealth is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Real Assets Portfolio and Commonwealth Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Global 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 Commonwealth Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Global has no effect on the direction of Real Assets i.e., Real Assets and Commonwealth Global go up and down completely randomly.
Pair Corralation between Real Assets and Commonwealth Global
Assuming the 90 days horizon Real Assets is expected to generate 2.02 times less return on investment than Commonwealth Global. But when comparing it to its historical volatility, Real Assets Portfolio is 2.38 times less risky than Commonwealth Global. It trades about 0.16 of its potential returns per unit of risk. Commonwealth Global Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,009 in Commonwealth Global Fund on May 27, 2025 and sell it today you would earn a total of 120.00 from holding Commonwealth Global Fund or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 79.37% |
| Values | Daily Returns |
Real Assets Portfolio vs. Commonwealth Global Fund
Performance |
| Timeline |
| Real Assets Portfolio |
Risk-Adjusted Performance
Good
Weak | Strong |
| Commonwealth Global |
Real Assets and Commonwealth Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Assets and Commonwealth Global
The main advantage of trading using opposite Real Assets and Commonwealth Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Assets position performs unexpectedly, Commonwealth Global 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 Commonwealth Global will offset losses from the drop in Commonwealth Global's long position.| Real Assets vs. Leuthold Global Fund | Real Assets vs. The Hartford Global | Real Assets vs. Legg Mason Global | Real Assets vs. The Hartford Global |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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