Correlation Between Multimedia Portfolio and Technology Fund

Can any of the company-specific risk be diversified away by investing in both Multimedia Portfolio and Technology Fund 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 Multimedia Portfolio and Technology Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Multimedia Portfolio Multimedia and Technology Fund Class, you can compare the effects of market volatilities on Multimedia Portfolio and Technology Fund 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 Multimedia Portfolio with a short position of Technology Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimedia Portfolio and Technology Fund.

Diversification Opportunities for Multimedia Portfolio and Technology Fund

0.88

Correlation Coefficient

Multimedia Portfolio  Technology Fund

Very poor diversification

The 3 months correlation between Multimedia and Technology is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Multimedia Portfolio Multimedi and Technology Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technology Fund Class and Multimedia Portfolio 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 Multimedia Portfolio Multimedia are associated (or correlated) with Technology Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technology Fund Class has no effect on the direction of Multimedia Portfolio i.e., Multimedia Portfolio and Technology Fund go up and down completely randomly.

Pair Corralation between Multimedia Portfolio and Technology Fund

Assuming the 90 days horizon Multimedia Portfolio is expected to generate 1.12 times less return on investment than Technology Fund. But when comparing it to its historical volatility, Multimedia Portfolio Multimedia is 1.02 times less risky than Technology Fund. It trades about 0.14 of its potential returns per unit of risk. Technology Fund Class is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  17,096  in Technology Fund Class on July 18, 2025 and sell it today you would earn a total of  2,005  from holding Technology Fund Class or generate 11.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Multimedia Portfolio Multimedi  vs.  Technology Fund Class

Multimedia Portfolio

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Multimedia Portfolio Multimedia are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Multimedia Portfolio may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Technology Fund Class

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Technology Fund Class are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Technology Fund may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Multimedia Portfolio and Technology Fund

The main advantage of trading using opposite Multimedia Portfolio and Technology Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimedia Portfolio position performs unexpectedly, Technology Fund 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 Technology Fund will offset losses from the drop in Technology Fund's long position.

The idea behind Multimedia Portfolio Multimedia and Technology Fund Class 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 Commodity Directory module to find actively traded commodities issued by global exchanges.