Correlation Between Aam/himco Short and Multimanager Lifestyle
Can any of the company-specific risk be diversified away by investing in both Aam/himco Short and Multimanager 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 Aam/himco Short and Multimanager Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aamhimco Short Duration and Multimanager Lifestyle Balanced, you can compare the effects of market volatilities on Aam/himco Short and Multimanager 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 Aam/himco Short with a short position of Multimanager Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam/himco Short and Multimanager Lifestyle.
Diversification Opportunities for Aam/himco Short and Multimanager Lifestyle
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aam/himco and Multimanager is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aamhimco Short Duration and Multimanager Lifestyle Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle and Aam/himco Short 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 Aamhimco Short Duration are associated (or correlated) with Multimanager Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimanager Lifestyle has no effect on the direction of Aam/himco Short i.e., Aam/himco Short and Multimanager Lifestyle go up and down completely randomly.
Pair Corralation between Aam/himco Short and Multimanager Lifestyle
Assuming the 90 days horizon Aam/himco Short is expected to generate 1.43 times less return on investment than Multimanager Lifestyle. But when comparing it to its historical volatility, Aamhimco Short Duration is 6.44 times less risky than Multimanager Lifestyle. It trades about 0.25 of its potential returns per unit of risk. Multimanager Lifestyle Balanced is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,150 in Multimanager Lifestyle Balanced on October 13, 2024 and sell it today you would earn a total of 172.00 from holding Multimanager Lifestyle Balanced or generate 14.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aamhimco Short Duration vs. Multimanager Lifestyle Balance
Performance |
| Timeline |
| Aamhimco Short Duration |
| Multimanager Lifestyle |
Aam/himco Short and Multimanager Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam/himco Short and Multimanager Lifestyle
The main advantage of trading using opposite Aam/himco Short and Multimanager Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam/himco Short position performs unexpectedly, Multimanager 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 Multimanager Lifestyle will offset losses from the drop in Multimanager Lifestyle's long position.| Aam/himco Short vs. T Rowe Price | Aam/himco Short vs. Leader Short Term Bond | Aam/himco Short vs. Metropolitan West Porate | Aam/himco Short vs. Morningstar Defensive Bond |
| Multimanager Lifestyle vs. Transamerica Short Term Bond | Multimanager Lifestyle vs. Aamhimco Short Duration | Multimanager Lifestyle vs. Siit Ultra Short | Multimanager Lifestyle vs. Jhancock Short Duration |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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