Correlation Between Commonwealth Real and Multimanager Lifestyle
Can any of the company-specific risk be diversified away by investing in both Commonwealth Real 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 Commonwealth Real and Multimanager Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Real Estate and Multimanager Lifestyle Growth, you can compare the effects of market volatilities on Commonwealth Real 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 Commonwealth Real with a short position of Multimanager Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Real and Multimanager Lifestyle.
Diversification Opportunities for Commonwealth Real and Multimanager Lifestyle
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Commonwealth and Multimanager is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Real Estate and Multimanager Lifestyle Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle and Commonwealth Real 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 Commonwealth Real Estate 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 Commonwealth Real i.e., Commonwealth Real and Multimanager Lifestyle go up and down completely randomly.
Pair Corralation between Commonwealth Real and Multimanager Lifestyle
Assuming the 90 days horizon Commonwealth Real is expected to generate 1.83 times less return on investment than Multimanager Lifestyle. In addition to that, Commonwealth Real is 2.05 times more volatile than Multimanager Lifestyle Growth. It trades about 0.06 of its total potential returns per unit of risk. Multimanager Lifestyle Growth is currently generating about 0.22 per unit of volatility. If you would invest 1,453 in Multimanager Lifestyle Growth on June 13, 2025 and sell it today you would earn a total of 97.00 from holding Multimanager Lifestyle Growth or generate 6.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Real Estate vs. Multimanager Lifestyle Growth
Performance |
| Timeline |
| Commonwealth Real Estate |
| Multimanager Lifestyle |
Commonwealth Real and Multimanager Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Real and Multimanager Lifestyle
The main advantage of trading using opposite Commonwealth Real and Multimanager Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Real 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.| Commonwealth Real vs. Commonwealth Global Fund | Commonwealth Real vs. Commonwealth Australianew Zealand | Commonwealth Real vs. Amg Managers Centersquare | Commonwealth Real vs. Commonwealth Japan Fund |
| Multimanager Lifestyle vs. Great West Real Estate | Multimanager Lifestyle vs. Baron Real Estate | Multimanager Lifestyle vs. Commonwealth Real Estate | Multimanager Lifestyle vs. Nomura 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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