Correlation Between Multi Asset and Moderate Strategy
Can any of the company-specific risk be diversified away by investing in both Multi Asset and Moderate Strategy 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 Multi Asset and Moderate Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Asset Growth Strategy and Moderate Strategy Fund, you can compare the effects of market volatilities on Multi Asset and Moderate Strategy 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 Multi Asset with a short position of Moderate Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Asset and Moderate Strategy.
Diversification Opportunities for Multi Asset and Moderate Strategy
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Multi and Moderate is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Multi Asset Growth Strategy and Moderate Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderate Strategy and Multi Asset 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 Multi Asset Growth Strategy are associated (or correlated) with Moderate Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderate Strategy has no effect on the direction of Multi Asset i.e., Multi Asset and Moderate Strategy go up and down completely randomly.
Pair Corralation between Multi Asset and Moderate Strategy
Assuming the 90 days horizon Multi Asset Growth Strategy is expected to generate 1.11 times more return on investment than Moderate Strategy. However, Multi Asset is 1.11 times more volatile than Moderate Strategy Fund. It trades about 0.31 of its potential returns per unit of risk. Moderate Strategy Fund is currently generating about 0.25 per unit of risk. If you would invest 1,065 in Multi Asset Growth Strategy on April 29, 2025 and sell it today you would earn a total of 80.00 from holding Multi Asset Growth Strategy or generate 7.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Multi Asset Growth Strategy vs. Moderate Strategy Fund
Performance |
Timeline |
Multi Asset Growth |
Moderate Strategy |
Multi Asset and Moderate Strategy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Multi Asset and Moderate Strategy
The main advantage of trading using opposite Multi Asset and Moderate Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Asset position performs unexpectedly, Moderate Strategy 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 Moderate Strategy will offset losses from the drop in Moderate Strategy's long position.Multi Asset vs. Wilmington Diversified Income | Multi Asset vs. Jpmorgan Diversified Fund | Multi Asset vs. Putnam Diversified Income | Multi Asset vs. Schwab Small Cap Index |
Moderate Strategy vs. Oppenheimer Gold Special | Moderate Strategy vs. First Eagle Gold | Moderate Strategy vs. Vy Goldman Sachs | Moderate Strategy vs. Gamco Global Gold |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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