Correlation Between Select Equity and Multi-asset Growth
Can any of the company-specific risk be diversified away by investing in both Select Equity and Multi-asset Growth 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 Select Equity and Multi-asset Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Equity Fund and Multi Asset Growth Strategy, you can compare the effects of market volatilities on Select Equity and Multi-asset Growth 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 Select Equity with a short position of Multi-asset Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Equity and Multi-asset Growth.
Diversification Opportunities for Select Equity and Multi-asset Growth
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Select and Multi-asset is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Select Equity Fund and Multi Asset Growth Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Asset Growth and Select Equity 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 Select Equity Fund are associated (or correlated) with Multi-asset Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Asset Growth has no effect on the direction of Select Equity i.e., Select Equity and Multi-asset Growth go up and down completely randomly.
Pair Corralation between Select Equity and Multi-asset Growth
Assuming the 90 days horizon Select Equity Fund is expected to generate 2.05 times more return on investment than Multi-asset Growth. However, Select Equity is 2.05 times more volatile than Multi Asset Growth Strategy. It trades about 0.31 of its potential returns per unit of risk. Multi Asset Growth Strategy is currently generating about 0.33 per unit of risk. If you would invest 1,428 in Select Equity Fund on April 25, 2025 and sell it today you would earn a total of 217.00 from holding Select Equity Fund or generate 15.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Select Equity Fund vs. Multi Asset Growth Strategy
Performance |
Timeline |
Select Equity |
Multi Asset Growth |
Select Equity and Multi-asset Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Select Equity and Multi-asset Growth
The main advantage of trading using opposite Select Equity and Multi-asset Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Equity position performs unexpectedly, Multi-asset Growth 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-asset Growth will offset losses from the drop in Multi-asset Growth's long position.Select Equity vs. Artisan High Income | Select Equity vs. Janus High Yield Fund | Select Equity vs. Pace High Yield | Select Equity vs. Transamerica High Yield |
Multi-asset Growth vs. Qs Small Capitalization | Multi-asset Growth vs. Goldman Sachs Small | Multi-asset Growth vs. Sp Smallcap 600 | Multi-asset Growth vs. Eagle Small Cap |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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