Correlation Between Multi Manager and Sp Midcap
Can any of the company-specific risk be diversified away by investing in both Multi Manager and Sp Midcap 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 and Sp Midcap 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 Sp Midcap Index, you can compare the effects of market volatilities on Multi Manager and Sp Midcap 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 with a short position of Sp Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Sp Midcap.
Diversification Opportunities for Multi Manager and Sp Midcap
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and SPMIX is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager High Yield and Sp Midcap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp Midcap Index and Multi Manager 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 Sp Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp Midcap Index has no effect on the direction of Multi Manager i.e., Multi Manager and Sp Midcap go up and down completely randomly.
Pair Corralation between Multi Manager and Sp Midcap
Assuming the 90 days horizon Multi Manager is expected to generate 1.21 times less return on investment than Sp Midcap. But when comparing it to its historical volatility, Multi Manager High Yield is 4.67 times less risky than Sp Midcap. It trades about 0.14 of its potential returns per unit of risk. Sp Midcap Index is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,317 in Sp Midcap Index on September 3, 2024 and sell it today you would earn a total of 432.00 from holding Sp Midcap Index or generate 18.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Manager High Yield vs. Sp Midcap Index
Performance |
| Timeline |
| Multi Manager High |
| Sp Midcap Index |
Multi Manager and Sp Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Manager and Sp Midcap
The main advantage of trading using opposite Multi Manager and Sp Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager position performs unexpectedly, Sp Midcap 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 Sp Midcap will offset losses from the drop in Sp Midcap's long position.| Multi Manager vs. Intermediate Term Tax Free Bond | Multi Manager vs. Federated Pennsylvania Municipal | Multi Manager vs. Ishares Municipal Bond | Multi Manager vs. Morningstar Municipal Bond |
| Sp Midcap vs. T Rowe Price | Sp Midcap vs. Qs Moderate Growth | Sp Midcap vs. Hood River New | Sp Midcap vs. T Rowe Price |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |