Correlation Between Ariel Focus and Api Multi-asset

Can any of the company-specific risk be diversified away by investing in both Ariel Focus and Api 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 Ariel Focus and Api Multi-asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ariel Focus Fund and Api Multi Asset Income, you can compare the effects of market volatilities on Ariel Focus and Api 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 Ariel Focus with a short position of Api Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ariel Focus and Api Multi-asset.

Diversification Opportunities for Ariel Focus and Api Multi-asset

0.89

Correlation Coefficient

Ariel Focus  Api Multi-asset

Very poor diversification

The 3 months correlation between Ariel and Api is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ariel Focus Fund and Api Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Api Multi Asset and Ariel Focus 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 Ariel Focus Fund are associated (or correlated) with Api 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 Api Multi Asset has no effect on the direction of Ariel Focus i.e., Ariel Focus and Api Multi-asset go up and down completely randomly.

Pair Corralation between Ariel Focus and Api Multi-asset

Assuming the 90 days horizon Ariel Focus Fund is expected to generate 5.7 times more return on investment than Api Multi-asset. However, Ariel Focus is 5.7 times more volatile than Api Multi Asset Income. It trades about 0.3 of its potential returns per unit of risk. Api Multi Asset Income is currently generating about 0.12 per unit of risk. If you would invest  1,480  in Ariel Focus Fund on April 27, 2025 and sell it today you would earn a total of  277.00  from holding Ariel Focus Fund or generate 18.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Ariel Focus Fund  vs.  Api Multi Asset Income

Ariel Focus Fund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ariel Focus Fund are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ariel Focus showed solid returns over the last few months and may actually be approaching a breakup point.

Api Multi Asset

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Api Multi Asset Income are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Api Multi-asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ariel Focus and Api Multi-asset

The main advantage of trading using opposite Ariel Focus and Api Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ariel Focus position performs unexpectedly, Api 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 Api Multi-asset will offset losses from the drop in Api Multi-asset's long position.

The idea behind Ariel Focus Fund and Api Multi Asset Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.