Correlation Between Cref Inflation and Ab Bond
Can any of the company-specific risk be diversified away by investing in both Cref Inflation and Ab 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 Cref Inflation and Ab Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Inflation Linked Bond and Ab Bond Inflation, you can compare the effects of market volatilities on Cref Inflation and Ab 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 Cref Inflation with a short position of Ab Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Inflation and Ab Bond.
Diversification Opportunities for Cref Inflation and Ab Bond
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Cref and ABNTX is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Cref Inflation Linked Bond and Ab Bond Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Bond Inflation and Cref Inflation 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 Cref Inflation Linked Bond are associated (or correlated) with Ab Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Bond Inflation has no effect on the direction of Cref Inflation i.e., Cref Inflation and Ab Bond go up and down completely randomly.
Pair Corralation between Cref Inflation and Ab Bond
Assuming the 90 days trading horizon Cref Inflation is expected to generate 1.03 times less return on investment than Ab Bond. In addition to that, Cref Inflation is 1.1 times more volatile than Ab Bond Inflation. It trades about 0.18 of its total potential returns per unit of risk. Ab Bond Inflation is currently generating about 0.2 per unit of volatility. If you would invest 1,012 in Ab Bond Inflation on April 20, 2025 and sell it today you would earn a total of 23.00 from holding Ab Bond Inflation or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cref Inflation Linked Bond vs. Ab Bond Inflation
Performance |
| Timeline |
| Cref Inflation Linked |
| Ab Bond Inflation |
Cref Inflation and Ab Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Inflation and Ab Bond
The main advantage of trading using opposite Cref Inflation and Ab Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Inflation position performs unexpectedly, Ab 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 Ab Bond will offset losses from the drop in Ab Bond's long position.| Cref Inflation vs. Pace High Yield | Cref Inflation vs. Ab High Income | Cref Inflation vs. Needham Aggressive Growth | Cref Inflation vs. Ab High Income |
| Ab Bond vs. Profunds Large Cap Growth | Ab Bond vs. Qs Large Cap | Ab Bond vs. Tax Managed Large Cap | Ab Bond vs. Siit Large Cap |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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