Correlation Between Multimanager Lifestyle and Walthausen Small
Can any of the company-specific risk be diversified away by investing in both Multimanager Lifestyle and Walthausen Small 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 Walthausen Small 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 Walthausen Small Cap, you can compare the effects of market volatilities on Multimanager Lifestyle and Walthausen Small 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 Walthausen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimanager Lifestyle and Walthausen Small.
Diversification Opportunities for Multimanager Lifestyle and Walthausen Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Multimanager and Walthausen is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Multimanager Lifestyle Aggress and Walthausen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walthausen Small Cap 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 Walthausen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walthausen Small Cap has no effect on the direction of Multimanager Lifestyle i.e., Multimanager Lifestyle and Walthausen Small go up and down completely randomly.
Pair Corralation between Multimanager Lifestyle and Walthausen Small
Assuming the 90 days horizon Multimanager Lifestyle Aggressive is expected to generate 0.9 times more return on investment than Walthausen Small. However, Multimanager Lifestyle Aggressive is 1.11 times less risky than Walthausen Small. It trades about -0.1 of its potential returns per unit of risk. Walthausen Small Cap is currently generating about -0.12 per unit of risk. If you would invest 1,457 in Multimanager Lifestyle Aggressive on January 14, 2025 and sell it today you would lose (87.00) from holding Multimanager Lifestyle Aggressive or give up 5.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multimanager Lifestyle Aggress vs. Walthausen Small Cap
Performance |
| Timeline |
| Multimanager Lifestyle |
| Walthausen Small Cap |
Multimanager Lifestyle and Walthausen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multimanager Lifestyle and Walthausen Small
The main advantage of trading using opposite Multimanager Lifestyle and Walthausen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimanager Lifestyle position performs unexpectedly, Walthausen Small 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 Walthausen Small will offset losses from the drop in Walthausen Small's long position.The idea behind Multimanager Lifestyle Aggressive and Walthausen Small Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Walthausen Small vs. American Funds Retirement | Walthausen Small vs. Target Retirement 2040 | Walthausen Small vs. T Rowe Price | Walthausen Small vs. John Hancock Funds |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |