Correlation Between Schwab Treasury and Inflation Adjusted
Can any of the company-specific risk be diversified away by investing in both Schwab Treasury and Inflation Adjusted 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 Schwab Treasury and Inflation Adjusted into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schwab Treasury Inflation and Inflation Adjusted Bond Fund, you can compare the effects of market volatilities on Schwab Treasury and Inflation Adjusted 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 Schwab Treasury with a short position of Inflation Adjusted. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schwab Treasury and Inflation Adjusted.
Diversification Opportunities for Schwab Treasury and Inflation Adjusted
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Schwab and Inflation is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Schwab Treasury Inflation and Inflation Adjusted Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Adjusted Bond and Schwab Treasury 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 Schwab Treasury Inflation are associated (or correlated) with Inflation Adjusted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Adjusted Bond has no effect on the direction of Schwab Treasury i.e., Schwab Treasury and Inflation Adjusted go up and down completely randomly.
Pair Corralation between Schwab Treasury and Inflation Adjusted
Assuming the 90 days horizon Schwab Treasury is expected to generate 1.0 times less return on investment than Inflation Adjusted. In addition to that, Schwab Treasury is 1.0 times more volatile than Inflation Adjusted Bond Fund. It trades about 0.28 of its total potential returns per unit of risk. Inflation Adjusted Bond Fund is currently generating about 0.28 per unit of volatility. If you would invest 1,040 in Inflation Adjusted Bond Fund on June 10, 2025 and sell it today you would earn a total of 41.00 from holding Inflation Adjusted Bond Fund or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schwab Treasury Inflation vs. Inflation Adjusted Bond Fund
Performance |
| Timeline |
| Schwab Treasury Inflation |
| Inflation Adjusted Bond |
Schwab Treasury and Inflation Adjusted Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schwab Treasury and Inflation Adjusted
The main advantage of trading using opposite Schwab Treasury and Inflation Adjusted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schwab Treasury position performs unexpectedly, Inflation Adjusted 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 Inflation Adjusted will offset losses from the drop in Inflation Adjusted's long position.| Schwab Treasury vs. Laudus Large Cap | Schwab Treasury vs. Schwab Target 2010 | Schwab Treasury vs. Schwab California Tax Free | Schwab Treasury vs. Schwab Markettrack Servative |
| Inflation Adjusted vs. Mid Cap Value | Inflation Adjusted vs. Equity Growth Fund | Inflation Adjusted vs. Income Growth Fund | Inflation Adjusted 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |