Correlation Between Pace International and Multi-index 2045

Can any of the company-specific risk be diversified away by investing in both Pace International and Multi-index 2045 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 Pace International and Multi-index 2045 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pace International Emerging and Multi Index 2045 Lifetime, you can compare the effects of market volatilities on Pace International and Multi-index 2045 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 Pace International with a short position of Multi-index 2045. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and Multi-index 2045.

Diversification Opportunities for Pace International and Multi-index 2045

0.99

Correlation Coefficient

Pace International  Multi-index 2045

No risk reduction

The 3 months correlation between Pace and Multi-index is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging and Multi Index 2045 Lifetime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Index 2045 and Pace International 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 Pace International Emerging are associated (or correlated) with Multi-index 2045. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Index 2045 has no effect on the direction of Pace International i.e., Pace International and Multi-index 2045 go up and down completely randomly.

Pair Corralation between Pace International and Multi-index 2045

Assuming the 90 days horizon Pace International Emerging is expected to generate 0.99 times more return on investment than Multi-index 2045. However, Pace International Emerging is 1.01 times less risky than Multi-index 2045. It trades about 0.39 of its potential returns per unit of risk. Multi Index 2045 Lifetime is currently generating about 0.34 per unit of risk. If you would invest  1,331  in Pace International Emerging on April 23, 2025 and sell it today you would earn a total of  211.00  from holding Pace International Emerging or generate 15.85% return on investment over 90 days.

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

Pace International Emerging  vs.  Multi Index 2045 Lifetime

Pace International

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Pace International Emerging are ranked lower than 30 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Pace International showed solid returns over the last few months and may actually be approaching a breakup point.

Multi Index 2045

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Index 2045 Lifetime are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Multi-index 2045 showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pace International and Multi-index 2045

The main advantage of trading using opposite Pace International and Multi-index 2045 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International position performs unexpectedly, Multi-index 2045 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-index 2045 will offset losses from the drop in Multi-index 2045's long position.

The idea behind Pace International Emerging and Multi Index 2045 Lifetime 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.