Correlation Between Global Multi-strategy and Edge Midcap
Can any of the company-specific risk be diversified away by investing in both Global Multi-strategy and Edge 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 Global Multi-strategy and Edge Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Multi Strategy Fund and Edge Midcap Fund, you can compare the effects of market volatilities on Global Multi-strategy and Edge 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 Global Multi-strategy with a short position of Edge Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Multi-strategy and Edge Midcap.
Diversification Opportunities for Global Multi-strategy and Edge Midcap
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Edge is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Global Multi Strategy Fund and Edge Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edge Midcap Fund and Global Multi-strategy 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 Global Multi Strategy Fund are associated (or correlated) with Edge Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edge Midcap Fund has no effect on the direction of Global Multi-strategy i.e., Global Multi-strategy and Edge Midcap go up and down completely randomly.
Pair Corralation between Global Multi-strategy and Edge Midcap
Assuming the 90 days horizon Global Multi-strategy is expected to generate 4.26 times less return on investment than Edge Midcap. But when comparing it to its historical volatility, Global Multi Strategy Fund is 3.86 times less risky than Edge Midcap. It trades about 0.36 of its potential returns per unit of risk. Edge Midcap Fund is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 1,327 in Edge Midcap Fund on September 3, 2024 and sell it today you would earn a total of 98.00 from holding Edge Midcap Fund or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Multi Strategy Fund vs. Edge Midcap Fund
Performance |
| Timeline |
| Global Multi Strategy |
| Edge Midcap Fund |
Global Multi-strategy and Edge Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Multi-strategy and Edge Midcap
The main advantage of trading using opposite Global Multi-strategy and Edge Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Multi-strategy position performs unexpectedly, Edge 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 Edge Midcap will offset losses from the drop in Edge Midcap's long position.| Global Multi-strategy vs. Columbia Real Estate | Global Multi-strategy vs. Columbia Real Estate | Global Multi-strategy vs. Us Real Estate | Global Multi-strategy vs. Prudential Real Estate |
| Edge Midcap vs. Massmutual Premier Diversified | Edge Midcap vs. Western Asset Diversified | Edge Midcap vs. Aqr Diversified Arbitrage | Edge Midcap vs. Blackrock Conservative Prprdptfinstttnl |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |