Correlation Between One Choice and Lifestyle
Can any of the company-specific risk be diversified away by investing in both One Choice and Lifestyle 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 One Choice and Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Choice Portfolio and Lifestyle Ii Aggressive, you can compare the effects of market volatilities on One Choice and Lifestyle 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 One Choice with a short position of Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Choice and Lifestyle.
Diversification Opportunities for One Choice and Lifestyle
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between One and Lifestyle is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding One Choice Portfolio and Lifestyle Ii Aggressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifestyle Ii Aggressive and One Choice 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 One Choice Portfolio are associated (or correlated) with Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifestyle Ii Aggressive has no effect on the direction of One Choice i.e., One Choice and Lifestyle go up and down completely randomly.
Pair Corralation between One Choice and Lifestyle
Assuming the 90 days horizon One Choice is expected to generate 1.21 times less return on investment than Lifestyle. But when comparing it to its historical volatility, One Choice Portfolio is 2.06 times less risky than Lifestyle. It trades about 0.24 of its potential returns per unit of risk. Lifestyle Ii Aggressive is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,398 in Lifestyle Ii Aggressive on September 13, 2024 and sell it today you would earn a total of 18.00 from holding Lifestyle Ii Aggressive or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
One Choice Portfolio vs. Lifestyle Ii Aggressive
Performance |
| Timeline |
| One Choice Portfolio |
| Lifestyle Ii Aggressive |
One Choice and Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Choice and Lifestyle
The main advantage of trading using opposite One Choice and Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Choice position performs unexpectedly, Lifestyle 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 Lifestyle will offset losses from the drop in Lifestyle's long position.| One Choice vs. One Choice Portfolio | One Choice vs. One Choice Portfolio | One Choice vs. One Choice Portfolio | One Choice vs. One Choice Portfolio |
| Lifestyle vs. Oppenheimer Gold Special | Lifestyle vs. Great West Goldman Sachs | Lifestyle vs. Global Gold Fund | Lifestyle vs. Vy Goldman Sachs |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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