Correlation Between Union Street and Multimanager Lifestyle
Can any of the company-specific risk be diversified away by investing in both Union Street and Multimanager Lifestyle 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 Union Street and Multimanager Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Street Partners and Multimanager Lifestyle Moderate, you can compare the effects of market volatilities on Union Street and Multimanager Lifestyle 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 Union Street with a short position of Multimanager Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Street and Multimanager Lifestyle.
Diversification Opportunities for Union Street and Multimanager Lifestyle
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Union and MULTIMANAGER is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Union Street Partners and Multimanager Lifestyle Moderat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle and Union Street 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 Union Street Partners are associated (or correlated) with Multimanager Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimanager Lifestyle has no effect on the direction of Union Street i.e., Union Street and Multimanager Lifestyle go up and down completely randomly.
Pair Corralation between Union Street and Multimanager Lifestyle
Assuming the 90 days horizon Union Street Partners is expected to generate 1.94 times more return on investment than Multimanager Lifestyle. However, Union Street is 1.94 times more volatile than Multimanager Lifestyle Moderate. It trades about 0.08 of its potential returns per unit of risk. Multimanager Lifestyle Moderate is currently generating about 0.14 per unit of risk. If you would invest 2,799 in Union Street Partners on September 2, 2024 and sell it today you would earn a total of 388.00 from holding Union Street Partners or generate 13.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Street Partners vs. Multimanager Lifestyle Moderat
Performance |
| Timeline |
| Union Street Partners |
| Multimanager Lifestyle |
Union Street and Multimanager Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Street and Multimanager Lifestyle
The main advantage of trading using opposite Union Street and Multimanager Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Street position performs unexpectedly, Multimanager Lifestyle 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 Multimanager Lifestyle will offset losses from the drop in Multimanager Lifestyle's long position.| Union Street vs. Leggmason Partners Institutional | Union Street vs. Falcon Focus Scv | Union Street vs. Balanced Fund Investor | Union Street vs. Volumetric Fund Volumetric |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |