Correlation Between Multi-asset Growth and Moderate Strategy
Can any of the company-specific risk be diversified away by investing in both Multi-asset Growth and Moderate 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 Moderate 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 Moderate Strategy Fund, you can compare the effects of market volatilities on Multi-asset Growth and Moderate 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 Moderate Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi-asset Growth and Moderate Strategy.
Diversification Opportunities for Multi-asset Growth and Moderate Strategy
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Multi-asset and Moderate is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Multi Asset Growth Strategy and Moderate Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderate 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 Moderate Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderate Strategy has no effect on the direction of Multi-asset Growth i.e., Multi-asset Growth and Moderate Strategy go up and down completely randomly.
Pair Corralation between Multi-asset Growth and Moderate Strategy
Assuming the 90 days horizon Multi Asset Growth Strategy is expected to under-perform the Moderate Strategy. In addition to that, Multi-asset Growth is 1.45 times more volatile than Moderate Strategy Fund. It trades about -0.08 of its total potential returns per unit of risk. Moderate Strategy Fund is currently generating about -0.12 per unit of volatility. If you would invest 953.00 in Moderate Strategy Fund on January 24, 2025 and sell it today you would lose (26.00) from holding Moderate Strategy Fund or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Asset Growth Strategy vs. Moderate Strategy Fund
Performance |
| Timeline |
| Multi Asset Growth |
| Moderate Strategy |
Multi-asset Growth and Moderate Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi-asset Growth and Moderate Strategy
The main advantage of trading using opposite Multi-asset Growth and Moderate Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi-asset Growth position performs unexpectedly, Moderate 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 Moderate Strategy will offset losses from the drop in Moderate Strategy's long position.| Multi-asset Growth vs. International Developed Markets | Multi-asset Growth vs. Global Real Estate | Multi-asset Growth vs. Global Real Estate | Multi-asset Growth vs. Global Real Estate |
| Moderate Strategy vs. International Developed Markets | Moderate Strategy vs. Global Real Estate | Moderate Strategy vs. Global Real Estate | Moderate Strategy 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |