Correlation Between Growth Fund and Global Bond
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Global 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 Fund and Global Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Global Bond Fund, you can compare the effects of market volatilities on Growth Fund and Global 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 Fund with a short position of Global Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Global Bond.
Diversification Opportunities for Growth Fund and Global Bond
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growth and Global is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Global Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Bond Fund and Growth Fund 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 Fund Of are associated (or correlated) with Global Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Bond Fund has no effect on the direction of Growth Fund i.e., Growth Fund and Global Bond go up and down completely randomly.
Pair Corralation between Growth Fund and Global Bond
Assuming the 90 days horizon Growth Fund Of is expected to generate 7.1 times more return on investment than Global Bond. However, Growth Fund is 7.1 times more volatile than Global Bond Fund. It trades about 0.08 of its potential returns per unit of risk. Global Bond Fund is currently generating about 0.18 per unit of risk. If you would invest 8,522 in Growth Fund Of on September 3, 2025 and sell it today you would earn a total of 387.00 from holding Growth Fund Of or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Global Bond Fund
Performance |
| Timeline |
| Growth Fund |
| Global Bond Fund |
Growth Fund and Global Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Global Bond
The main advantage of trading using opposite Growth Fund and Global Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Global 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 Global Bond will offset losses from the drop in Global Bond's long position.| Growth Fund vs. Alpine Ultra Short | Growth Fund vs. Aamhimco Short Duration | Growth Fund vs. Old Westbury Short Term | Growth Fund vs. Diamond Hill Long Short |
| Global Bond vs. Mid Cap Value | Global Bond vs. Equity Growth Fund | Global Bond vs. Income Growth Fund | Global Bond vs. Diversified Bond Fund |
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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