Correlation Between Multimanager Lifestyle and Chestnut Street
Can any of the company-specific risk be diversified away by investing in both Multimanager Lifestyle and Chestnut Street 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 Chestnut Street 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 Chestnut Street Exchange, you can compare the effects of market volatilities on Multimanager Lifestyle and Chestnut Street 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 Chestnut Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimanager Lifestyle and Chestnut Street.
Diversification Opportunities for Multimanager Lifestyle and Chestnut Street
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MULTIMANAGER and Chestnut is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Multimanager Lifestyle Aggress and Chestnut Street Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chestnut Street Exchange 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 Chestnut Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chestnut Street Exchange has no effect on the direction of Multimanager Lifestyle i.e., Multimanager Lifestyle and Chestnut Street go up and down completely randomly.
Pair Corralation between Multimanager Lifestyle and Chestnut Street
Assuming the 90 days horizon Multimanager Lifestyle is expected to generate 1.64 times less return on investment than Chestnut Street. But when comparing it to its historical volatility, Multimanager Lifestyle Aggressive is 1.18 times less risky than Chestnut Street. It trades about 0.32 of its potential returns per unit of risk. Chestnut Street Exchange is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 111,270 in Chestnut Street Exchange on September 4, 2024 and sell it today you would earn a total of 7,422 from holding Chestnut Street Exchange or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Multimanager Lifestyle Aggress vs. Chestnut Street Exchange
Performance |
| Timeline |
| Multimanager Lifestyle |
| Chestnut Street Exchange |
Multimanager Lifestyle and Chestnut Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multimanager Lifestyle and Chestnut Street
The main advantage of trading using opposite Multimanager Lifestyle and Chestnut Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimanager Lifestyle position performs unexpectedly, Chestnut Street 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 Chestnut Street will offset losses from the drop in Chestnut Street'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 |
| Chestnut Street vs. Multimanager Lifestyle Aggressive | Chestnut Street vs. Morningstar Aggressive Growth | Chestnut Street vs. Calvert High Yield | Chestnut Street vs. Gmo High Yield |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |