Correlation Between Multi-asset Growth and Select Us

Can any of the company-specific risk be diversified away by investing in both Multi-asset Growth and Select Us 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 Growth and Select Us 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 Select Equity Fund, you can compare the effects of market volatilities on Multi-asset Growth and Select Us 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 Growth with a short position of Select Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi-asset Growth and Select Us.

Diversification Opportunities for Multi-asset Growth and Select Us

0.53

Correlation Coefficient

Multi-asset Growth  Select Us

Very weak diversification

The 3 months correlation between Multi-asset and Select is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Multi Asset Growth Strategy and Select Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Equity and Multi-asset Growth 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 Select Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Equity has no effect on the direction of Multi-asset Growth i.e., Multi-asset Growth and Select Us go up and down completely randomly.

Pair Corralation between Multi-asset Growth and Select Us

Assuming the 90 days horizon Multi-asset Growth is expected to generate 1.53 times less return on investment than Select Us. But when comparing it to its historical volatility, Multi Asset Growth Strategy is 1.82 times less risky than Select Us. It trades about 0.23 of its potential returns per unit of risk. Select Equity Fund is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,550  in Select Equity Fund on May 17, 2025 and sell it today you would earn a total of  126.00  from holding Select Equity Fund or generate 8.13% return on investment over 90 days.

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

Multi Asset Growth Strategy  vs.  Select Equity Fund

Multi Asset Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Asset Growth Strategy are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Multi-asset Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Select Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Select Equity Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Select Us may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Multi-asset Growth and Select Us

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

The idea behind Multi Asset Growth Strategy and Select Equity Fund 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.