Correlation Between Principal Lifetime and All Asset
Can any of the company-specific risk be diversified away by investing in both Principal Lifetime and All Asset 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 Lifetime and All Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Principal Lifetime Hybrid and All Asset Fund, you can compare the effects of market volatilities on Principal Lifetime and All Asset 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 Lifetime with a short position of All Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Principal Lifetime and All Asset.
Diversification Opportunities for Principal Lifetime and All Asset
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PRINCIPAL and All is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Principal Lifetime Hybrid and All Asset Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All Asset Fund and Principal Lifetime 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 Lifetime Hybrid are associated (or correlated) with All Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All Asset Fund has no effect on the direction of Principal Lifetime i.e., Principal Lifetime and All Asset go up and down completely randomly.
Pair Corralation between Principal Lifetime and All Asset
Assuming the 90 days horizon Principal Lifetime Hybrid is expected to generate 0.9 times more return on investment than All Asset. However, Principal Lifetime Hybrid is 1.12 times less risky than All Asset. It trades about 0.24 of its potential returns per unit of risk. All Asset Fund is currently generating about 0.2 per unit of risk. If you would invest 1,214 in Principal Lifetime Hybrid on June 11, 2025 and sell it today you would earn a total of 59.00 from holding Principal Lifetime Hybrid or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Principal Lifetime Hybrid vs. All Asset Fund
Performance |
| Timeline |
| Principal Lifetime Hybrid |
| All Asset Fund |
Principal Lifetime and All Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Principal Lifetime and All Asset
The main advantage of trading using opposite Principal Lifetime and All Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Principal Lifetime position performs unexpectedly, All Asset 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 All Asset will offset losses from the drop in All Asset's long position.| Principal Lifetime vs. Siit Equity Factor | Principal Lifetime vs. Goldman Sachs Equity | Principal Lifetime vs. Ab Select Equity | Principal Lifetime vs. Old Westbury Fixed |
| All Asset vs. John Hancock Municipal | All Asset vs. Fidelity California Municipal | All Asset vs. Old Westbury Municipal | All Asset vs. Bbh Intermediate Municipal |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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