Correlation Between Centerstone Investors and Multi Manager
Can any of the company-specific risk be diversified away by investing in both Centerstone Investors and Multi Manager 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 Centerstone Investors and Multi Manager into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centerstone Investors Fund and Multi Manager High Yield, you can compare the effects of market volatilities on Centerstone Investors and Multi Manager 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 Centerstone Investors with a short position of Multi Manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centerstone Investors and Multi Manager.
Diversification Opportunities for Centerstone Investors and Multi Manager
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Centerstone and Multi is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Centerstone Investors Fund and Multi Manager High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager High and Centerstone Investors 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 Centerstone Investors Fund are associated (or correlated) with Multi Manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager High has no effect on the direction of Centerstone Investors i.e., Centerstone Investors and Multi Manager go up and down completely randomly.
Pair Corralation between Centerstone Investors and Multi Manager
Assuming the 90 days horizon Centerstone Investors Fund is expected to generate 3.61 times more return on investment than Multi Manager. However, Centerstone Investors is 3.61 times more volatile than Multi Manager High Yield. It trades about 0.34 of its potential returns per unit of risk. Multi Manager High Yield is currently generating about 0.51 per unit of risk. If you would invest 1,162 in Centerstone Investors Fund on April 7, 2025 and sell it today you would earn a total of 192.00 from holding Centerstone Investors Fund or generate 16.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centerstone Investors Fund vs. Multi Manager High Yield
Performance |
| Timeline |
| Centerstone Investors |
| Multi Manager High |
Centerstone Investors and Multi Manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centerstone Investors and Multi Manager
The main advantage of trading using opposite Centerstone Investors and Multi Manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centerstone Investors position performs unexpectedly, Multi Manager 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 Multi Manager will offset losses from the drop in Multi Manager's long position.| Centerstone Investors vs. Prudential National Muni | Centerstone Investors vs. Inverse Government Long | Centerstone Investors vs. Aig Government Money | Centerstone Investors vs. John Hancock Municipal |
| Multi Manager vs. Palm Valley Capital | Multi Manager vs. Small Cap Growth Profund | Multi Manager vs. Prudential Qma Mid-cap | Multi Manager vs. Fpa Queens Road |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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