Correlation Between US Treasury and Valued Advisers

Can any of the company-specific risk be diversified away by investing in both US Treasury and Valued Advisers 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 US Treasury and Valued Advisers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US Treasury 6 and Valued Advisers Trust, you can compare the effects of market volatilities on US Treasury and Valued Advisers 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 US Treasury with a short position of Valued Advisers. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Treasury and Valued Advisers.

Diversification Opportunities for US Treasury and Valued Advisers

0.66

Correlation Coefficient

US Treasury  Valued Advisers

Poor diversification

The 3 months correlation between XBIL and Valued is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding US Treasury 6 and Valued Advisers Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valued Advisers Trust and US 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 US Treasury 6 are associated (or correlated) with Valued Advisers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valued Advisers Trust has no effect on the direction of US Treasury i.e., US Treasury and Valued Advisers go up and down completely randomly.

Pair Corralation between US Treasury and Valued Advisers

If you would invest (100.00) in US Treasury 6 on August 30, 2024 and sell it today you would earn a total of  100.00  from holding US Treasury 6 or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.0%
Values	Daily Returns

US Treasury 6  vs.  Valued Advisers Trust

US Treasury 6

Risk-Adjusted Performance

0 of 100

Excellent

Over the last 90 days US Treasury 6 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, US Treasury is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Valued Advisers Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Valued Advisers Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Valued Advisers is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with US Treasury and Valued Advisers

The main advantage of trading using opposite US Treasury and Valued Advisers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Treasury position performs unexpectedly, Valued Advisers 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 Valued Advisers will offset losses from the drop in Valued Advisers' long position.

The idea behind US Treasury 6 and Valued Advisers Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.