Correlation Between Multimanager Lifestyle and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Multimanager Lifestyle and Emerging Markets 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 Multimanager Lifestyle and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multimanager Lifestyle Aggressive and Emerging Markets Fund, you can compare the effects of market volatilities on Multimanager Lifestyle and Emerging Markets 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 Multimanager Lifestyle with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimanager Lifestyle and Emerging Markets.
Diversification Opportunities for Multimanager Lifestyle and Emerging Markets
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Multimanager and Emerging is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Multimanager Lifestyle Aggress and Emerging Markets Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets and Multimanager Lifestyle 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 Multimanager Lifestyle Aggressive are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Multimanager Lifestyle i.e., Multimanager Lifestyle and Emerging Markets go up and down completely randomly.
Pair Corralation between Multimanager Lifestyle and Emerging Markets
Assuming the 90 days horizon Multimanager Lifestyle Aggressive is expected to generate 0.99 times more return on investment than Emerging Markets. However, Multimanager Lifestyle Aggressive is 1.01 times less risky than Emerging Markets. It trades about 0.31 of its potential returns per unit of risk. Emerging Markets Fund is currently generating about 0.28 per unit of risk. If you would invest 1,397 in Multimanager Lifestyle Aggressive on April 24, 2025 and sell it today you would earn a total of 163.00 from holding Multimanager Lifestyle Aggressive or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Multimanager Lifestyle Aggress vs. Emerging Markets Fund
Performance |
| Timeline |
| Multimanager Lifestyle |
| Emerging Markets |
Multimanager Lifestyle and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multimanager Lifestyle and Emerging Markets
The main advantage of trading using opposite Multimanager Lifestyle and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimanager Lifestyle position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Multimanager Lifestyle vs. Fkhemx | Multimanager Lifestyle vs. Fa 529 Aggressive | Multimanager Lifestyle vs. Fdzbpx | Multimanager Lifestyle vs. Fbanjx |
| Emerging Markets vs. Sa Worldwide Moderate | Emerging Markets vs. Multimanager Lifestyle Moderate | Emerging Markets vs. Fidelity Managed Retirement | Emerging Markets vs. Tiaa Cref Lifestyle Servative |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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