Correlation Between Principal Global and Global Multi
Can any of the company-specific risk be diversified away by investing in both Principal Global and Global Multi 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 Principal Global and Global Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Principal Global Sustainable and Global Multi Strategy Fund, you can compare the effects of market volatilities on Principal Global and Global Multi 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 Principal Global with a short position of Global Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Principal Global and Global Multi.
Diversification Opportunities for Principal Global and Global Multi
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Principal and Global is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Principal Global Sustainable and Global Multi Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Multi Strategy and Principal Global 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 Principal Global Sustainable are associated (or correlated) with Global Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Multi Strategy has no effect on the direction of Principal Global i.e., Principal Global and Global Multi go up and down completely randomly.
Pair Corralation between Principal Global and Global Multi
Assuming the 90 days horizon Principal Global is expected to generate 1.63 times less return on investment than Global Multi. In addition to that, Principal Global is 3.27 times more volatile than Global Multi Strategy Fund. It trades about 0.08 of its total potential returns per unit of risk. Global Multi Strategy Fund is currently generating about 0.41 per unit of volatility. If you would invest 1,110 in Global Multi Strategy Fund on April 24, 2025 and sell it today you would earn a total of 50.00 from holding Global Multi Strategy Fund or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Principal Global Sustainable vs. Global Multi Strategy Fund
Performance |
| Timeline |
| Principal Global Sus |
| Global Multi Strategy |
Principal Global and Global Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Principal Global and Global Multi
The main advantage of trading using opposite Principal Global and Global Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Principal Global position performs unexpectedly, Global Multi 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 Global Multi will offset losses from the drop in Global Multi's long position.| Principal Global vs. Strategic Asset Management | Principal Global vs. Strategic Asset Management | Principal Global vs. Strategic Asset Management | Principal Global vs. Strategic Asset Management |
| Global Multi vs. Investec Emerging Markets | Global Multi vs. Nasdaq 100 2x Strategy | Global Multi vs. Rbc Emerging Markets | Global Multi vs. Fidelity Series Emerging |
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.
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