Correlation Between Multi-asset Growth and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both Multi-asset Growth and Growth Strategy 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-asset Growth and Growth Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Asset Growth Strategy and Growth Strategy Fund, you can compare the effects of market volatilities on Multi-asset Growth and Growth Strategy 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-asset Growth with a short position of Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi-asset Growth and Growth Strategy.
Diversification Opportunities for Multi-asset Growth and Growth Strategy
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Multi-asset and Growth is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Multi Asset Growth Strategy and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy and Multi-asset Growth 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 Asset Growth Strategy are associated (or correlated) with Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Multi-asset Growth i.e., Multi-asset Growth and Growth Strategy go up and down completely randomly.
Pair Corralation between Multi-asset Growth and Growth Strategy
Assuming the 90 days horizon Multi-asset Growth is expected to generate 77.0 times less return on investment than Growth Strategy. But when comparing it to its historical volatility, Multi Asset Growth Strategy is 1.24 times less risky than Growth Strategy. It trades about 0.0 of its potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,316 in Growth Strategy Fund on August 29, 2024 and sell it today you would earn a total of 22.00 from holding Growth Strategy Fund or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Asset Growth Strategy vs. Growth Strategy Fund
Performance |
| Timeline |
| Multi Asset Growth |
| Growth Strategy |
Multi-asset Growth and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi-asset Growth and Growth Strategy
The main advantage of trading using opposite Multi-asset Growth and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi-asset Growth position performs unexpectedly, Growth Strategy 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 Growth Strategy will offset losses from the drop in Growth Strategy's long position.| Multi-asset Growth vs. Nasdaq 100 2x Strategy | Multi-asset Growth vs. Shelton Emerging Markets | Multi-asset Growth vs. Angel Oak Multi Strategy | Multi-asset Growth vs. Barings Emerging Markets |
| Growth Strategy vs. Eip Growth And | Growth Strategy vs. Pace Smallmedium Growth | Growth Strategy vs. Praxis Growth Index | Growth Strategy vs. Qs Growth Fund |
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
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |