Correlation Between Lifestyle and Pacific Funds
Can any of the company-specific risk be diversified away by investing in both Lifestyle and Pacific Funds 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 Lifestyle and Pacific Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifestyle Ii Moderate and Pacific Funds Portfolio, you can compare the effects of market volatilities on Lifestyle and Pacific Funds 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 Lifestyle with a short position of Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifestyle and Pacific Funds.
Diversification Opportunities for Lifestyle and Pacific Funds
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lifestyle and Pacific is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lifestyle Ii Moderate and Pacific Funds Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Portfolio and Lifestyle 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 Lifestyle Ii Moderate are associated (or correlated) with Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Portfolio has no effect on the direction of Lifestyle i.e., Lifestyle and Pacific Funds go up and down completely randomly.
Pair Corralation between Lifestyle and Pacific Funds
Assuming the 90 days horizon Lifestyle Ii Moderate is expected to generate 1.19 times more return on investment than Pacific Funds. However, Lifestyle is 1.19 times more volatile than Pacific Funds Portfolio. It trades about 0.35 of its potential returns per unit of risk. Pacific Funds Portfolio is currently generating about 0.33 per unit of risk. If you would invest 1,096 in Lifestyle Ii Moderate on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Lifestyle Ii Moderate or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lifestyle Ii Moderate vs. Pacific Funds Portfolio
Performance |
| Timeline |
| Lifestyle Ii Moderate |
| Pacific Funds Portfolio |
Lifestyle and Pacific Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifestyle and Pacific Funds
The main advantage of trading using opposite Lifestyle and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifestyle position performs unexpectedly, Pacific Funds 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 Pacific Funds will offset losses from the drop in Pacific Funds' long position.| Lifestyle vs. Balanced Fund Investor | Lifestyle vs. T Rowe Price | Lifestyle vs. Fa 529 Aggressive | Lifestyle vs. Western Asset Municipal |
| Pacific Funds vs. Commonwealth Global Fund | Pacific Funds vs. Us Global Investors | Pacific Funds vs. Ms Global Fixed | Pacific Funds vs. Dreyfusstandish Global Fixed |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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