Correlation Between Pace International and Multi Asset
Can any of the company-specific risk be diversified away by investing in both Pace International and Multi Asset 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 Pace International and Multi Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace International Emerging and Multi Asset Growth Strategy, you can compare the effects of market volatilities on Pace International and Multi Asset 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 Pace International with a short position of Multi Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and Multi Asset.
Diversification Opportunities for Pace International and Multi Asset
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pace and Multi is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging and Multi Asset Growth Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Asset Growth and Pace International 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 Pace International Emerging are associated (or correlated) with Multi Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Asset Growth has no effect on the direction of Pace International i.e., Pace International and Multi Asset go up and down completely randomly.
Pair Corralation between Pace International and Multi Asset
Assuming the 90 days horizon Pace International Emerging is expected to generate 1.45 times more return on investment than Multi Asset. However, Pace International is 1.45 times more volatile than Multi Asset Growth Strategy. It trades about 0.22 of its potential returns per unit of risk. Multi Asset Growth Strategy is currently generating about 0.2 per unit of risk. If you would invest 1,330 in Pace International Emerging on September 15, 2024 and sell it today you would earn a total of 26.00 from holding Pace International Emerging or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace International Emerging vs. Multi Asset Growth Strategy
Performance |
| Timeline |
| Pace International |
| Multi Asset Growth |
Pace International and Multi Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace International and Multi Asset
The main advantage of trading using opposite Pace International and Multi Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International position performs unexpectedly, Multi Asset 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 Multi Asset will offset losses from the drop in Multi Asset's long position.| Pace International vs. Pace Smallmedium Value | Pace International vs. Pace International Equity | Pace International vs. Pace International Equity | Pace International vs. Ubs Allocation Fund |
| Multi Asset vs. International Developed Markets | Multi Asset vs. Global Real Estate | Multi Asset vs. Global Real Estate | Multi Asset vs. Global Real Estate |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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