Correlation Between Multi-manager High and Gold Bullion
Can any of the company-specific risk be diversified away by investing in both Multi-manager High and Gold Bullion 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 Multi-manager High and Gold Bullion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Manager High Yield and The Gold Bullion, you can compare the effects of market volatilities on Multi-manager High and Gold Bullion 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 Multi-manager High with a short position of Gold Bullion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi-manager High and Gold Bullion.
Diversification Opportunities for Multi-manager High and Gold Bullion
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Multi-manager and Gold is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager High Yield and The Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bullion and Multi-manager High 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 Multi Manager High Yield are associated (or correlated) with Gold Bullion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bullion has no effect on the direction of Multi-manager High i.e., Multi-manager High and Gold Bullion go up and down completely randomly.
Pair Corralation between Multi-manager High and Gold Bullion
Assuming the 90 days horizon Multi-manager High is expected to generate 7.17 times less return on investment than Gold Bullion. But when comparing it to its historical volatility, Multi Manager High Yield is 5.24 times less risky than Gold Bullion. It trades about 0.27 of its potential returns per unit of risk. The Gold Bullion is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,998 in The Gold Bullion on November 5, 2024 and sell it today you would earn a total of 121.00 from holding The Gold Bullion or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Manager High Yield vs. The Gold Bullion
Performance |
| Timeline |
| Multi Manager High |
| Gold Bullion |
Multi-manager High and Gold Bullion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi-manager High and Gold Bullion
The main advantage of trading using opposite Multi-manager High and Gold Bullion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi-manager High position performs unexpectedly, Gold Bullion 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 Gold Bullion will offset losses from the drop in Gold Bullion's long position.| Multi-manager High vs. Leader Short Term Bond | Multi-manager High vs. Alpine Ultra Short | Multi-manager High vs. Jhancock Short Duration | Multi-manager High vs. Touchstone Ultra Short |
| Gold Bullion vs. Massmutual Premier High | Gold Bullion vs. One Choice Portfolio | Gold Bullion vs. Transamerica High Yield | Gold Bullion vs. Calamos High Income |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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