Correlation Between Aam Select and Multimanager Lifestyle
Can any of the company-specific risk be diversified away by investing in both Aam Select 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 Select and Multimanager Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aam Select Income and Multimanager Lifestyle Moderate, you can compare the effects of market volatilities on Aam Select 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 Select with a short position of Multimanager Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam Select and Multimanager Lifestyle.
Diversification Opportunities for Aam Select and Multimanager Lifestyle
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aam and Multimanager is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aam Select Income and Multimanager Lifestyle Moderat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle and Aam Select 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 Aam Select Income 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 Select i.e., Aam Select and Multimanager Lifestyle go up and down completely randomly.
Pair Corralation between Aam Select and Multimanager Lifestyle
Assuming the 90 days horizon Aam Select is expected to generate 1.52 times less return on investment than Multimanager Lifestyle. But when comparing it to its historical volatility, Aam Select Income is 1.0 times less risky than Multimanager Lifestyle. It trades about 0.07 of its potential returns per unit of risk. Multimanager Lifestyle Moderate is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,099 in Multimanager Lifestyle Moderate on September 4, 2024 and sell it today you would earn a total of 175.00 from holding Multimanager Lifestyle Moderate or generate 15.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aam Select Income vs. Multimanager Lifestyle Moderat
Performance |
| Timeline |
| Aam Select Income |
| Multimanager Lifestyle |
Aam Select and Multimanager Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam Select and Multimanager Lifestyle
The main advantage of trading using opposite Aam Select and Multimanager Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam Select 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 Select vs. Dreyfusstandish Global Fixed | Aam Select vs. Ab Impact Municipal | Aam Select vs. T Rowe Price | Aam Select vs. Multisector Bond Sma |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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