Correlation Between Multimanager Lifestyle and Ab Global
Can any of the company-specific risk be diversified away by investing in both Multimanager Lifestyle and Ab Global 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 Multimanager Lifestyle and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multimanager Lifestyle Aggressive and Ab Global Risk, you can compare the effects of market volatilities on Multimanager Lifestyle and Ab Global 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 Multimanager Lifestyle with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimanager Lifestyle and Ab Global.
Diversification Opportunities for Multimanager Lifestyle and Ab Global
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MULTIMANAGER and CBSYX is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Multimanager Lifestyle Aggress and Ab Global Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Risk and Multimanager 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 Multimanager Lifestyle Aggressive are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Risk has no effect on the direction of Multimanager Lifestyle i.e., Multimanager Lifestyle and Ab Global go up and down completely randomly.
Pair Corralation between Multimanager Lifestyle and Ab Global
Assuming the 90 days horizon Multimanager Lifestyle Aggressive is expected to generate 1.68 times more return on investment than Ab Global. However, Multimanager Lifestyle is 1.68 times more volatile than Ab Global Risk. It trades about 0.32 of its potential returns per unit of risk. Ab Global Risk is currently generating about 0.37 per unit of risk. If you would invest 1,496 in Multimanager Lifestyle Aggressive on September 4, 2024 and sell it today you would earn a total of 63.00 from holding Multimanager Lifestyle Aggressive or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multimanager Lifestyle Aggress vs. Ab Global Risk
Performance |
| Timeline |
| Multimanager Lifestyle |
| Ab Global Risk |
Multimanager Lifestyle and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multimanager Lifestyle and Ab Global
The main advantage of trading using opposite Multimanager Lifestyle and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimanager Lifestyle position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| Multimanager Lifestyle vs. Needham Aggressive Growth | Multimanager Lifestyle vs. Calvert High Yield | Multimanager Lifestyle vs. Siit High Yield | Multimanager Lifestyle vs. Victory High Income |
| Ab Global vs. Towpath Technology | Ab Global vs. Allianzgi Technology Fund | Ab Global vs. Dreyfus Technology Growth | Ab Global vs. Mfs Technology Fund |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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