Correlation Between Mutual Of and Multimanager Lifestyle
Can any of the company-specific risk be diversified away by investing in both Mutual Of 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 Mutual Of and Multimanager Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mutual Of America and Multimanager Lifestyle Balanced, you can compare the effects of market volatilities on Mutual Of 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 Mutual Of with a short position of Multimanager Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutual Of and Multimanager Lifestyle.
Diversification Opportunities for Mutual Of and Multimanager Lifestyle
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mutual and Multimanager is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America and Multimanager Lifestyle Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle and Mutual Of 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 Mutual Of America 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 Mutual Of i.e., Mutual Of and Multimanager Lifestyle go up and down completely randomly.
Pair Corralation between Mutual Of and Multimanager Lifestyle
Assuming the 90 days horizon Mutual Of America is expected to generate 1.63 times more return on investment than Multimanager Lifestyle. However, Mutual Of is 1.63 times more volatile than Multimanager Lifestyle Balanced. It trades about 0.23 of its potential returns per unit of risk. Multimanager Lifestyle Balanced is currently generating about 0.21 per unit of risk. If you would invest 1,586 in Mutual Of America on April 29, 2025 and sell it today you would earn a total of 36.00 from holding Mutual Of America or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mutual Of America vs. Multimanager Lifestyle Balance
Performance |
| Timeline |
| Mutual Of America |
| Multimanager Lifestyle |
Mutual Of and Multimanager Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mutual Of and Multimanager Lifestyle
The main advantage of trading using opposite Mutual Of and Multimanager Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mutual Of 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.| Mutual Of vs. Highland Longshort Healthcare | Mutual Of vs. Deutsche Health And | Mutual Of vs. Prudential Health Sciences | Mutual Of vs. Baron Health Care |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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