Correlation Between Balanced Strategy and Multi Asset
Can any of the company-specific risk be diversified away by investing in both Balanced Strategy and Multi 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 Balanced Strategy and Multi Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Strategy Fund and Multi Asset Growth Strategy, you can compare the effects of market volatilities on Balanced Strategy and Multi 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 Balanced Strategy with a short position of Multi Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Strategy and Multi Asset.
Diversification Opportunities for Balanced Strategy and Multi Asset
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Balanced and Multi is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Strategy Fund and Multi Asset Growth Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Asset Growth and Balanced Strategy 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 Balanced Strategy Fund are associated (or correlated) with Multi Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Asset Growth has no effect on the direction of Balanced Strategy i.e., Balanced Strategy and Multi Asset go up and down completely randomly.
Pair Corralation between Balanced Strategy and Multi Asset
Assuming the 90 days horizon Balanced Strategy Fund is expected to generate 1.09 times more return on investment than Multi Asset. However, Balanced Strategy is 1.09 times more volatile than Multi Asset Growth Strategy. It trades about 0.21 of its potential returns per unit of risk. Multi Asset Growth Strategy is currently generating about 0.18 per unit of risk. If you would invest 1,125 in Balanced Strategy Fund on June 5, 2025 and sell it today you would earn a total of 61.00 from holding Balanced Strategy Fund or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Strategy Fund vs. Multi Asset Growth Strategy
Performance |
| Timeline |
| Balanced Strategy |
| Multi Asset Growth |
Balanced Strategy and Multi Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Strategy and Multi Asset
The main advantage of trading using opposite Balanced Strategy and Multi Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Strategy position performs unexpectedly, Multi 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 Multi Asset will offset losses from the drop in Multi Asset's long position.| Balanced Strategy vs. Baron Real Estate | Balanced Strategy vs. Pender Real Estate | Balanced Strategy vs. Principal Real Estate | Balanced Strategy vs. Short Real Estate |
| Multi Asset vs. Goldman Sachs Technology | Multi Asset vs. Allianzgi Technology Fund | Multi Asset vs. Fidelity Advisor Technology | Multi Asset vs. Science Technology Fund |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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