Correlation Between Multi-asset Growth and Short Duration
Can any of the company-specific risk be diversified away by investing in both Multi-asset Growth and Short Duration 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 Short Duration 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 Short Duration Bond, you can compare the effects of market volatilities on Multi-asset Growth and Short Duration 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 Short Duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi-asset Growth and Short Duration.
Diversification Opportunities for Multi-asset Growth and Short Duration
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Multi-asset and Short is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Multi Asset Growth Strategy and Short Duration Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Duration Bond 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 Short Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Duration Bond has no effect on the direction of Multi-asset Growth i.e., Multi-asset Growth and Short Duration go up and down completely randomly.
Pair Corralation between Multi-asset Growth and Short Duration
Assuming the 90 days horizon Multi Asset Growth Strategy is expected to generate 4.31 times more return on investment than Short Duration. However, Multi-asset Growth is 4.31 times more volatile than Short Duration Bond. It trades about 0.05 of its potential returns per unit of risk. Short Duration Bond is currently generating about 0.14 per unit of risk. If you would invest 894.00 in Multi Asset Growth Strategy on January 22, 2025 and sell it today you would earn a total of 115.00 from holding Multi Asset Growth Strategy or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Asset Growth Strategy vs. Short Duration Bond
Performance |
| Timeline |
| Multi Asset Growth |
| Short Duration Bond |
Multi-asset Growth and Short Duration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi-asset Growth and Short Duration
The main advantage of trading using opposite Multi-asset Growth and Short Duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi-asset Growth position performs unexpectedly, Short Duration 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 Short Duration will offset losses from the drop in Short Duration'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 |
| Short Duration vs. International Developed Markets | Short Duration vs. Global Real Estate | Short Duration vs. Global Real Estate | Short Duration 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.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| 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 | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |