Correlation Between Ultrasmall-cap Profund and Multimanager Lifestyle

Can any of the company-specific risk be diversified away by investing in both Ultrasmall-cap Profund and Multimanager Lifestyle 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 Ultrasmall-cap Profund and Multimanager Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ultrasmall Cap Profund Ultrasmall Cap and Multimanager Lifestyle Balanced, you can compare the effects of market volatilities on Ultrasmall-cap Profund and Multimanager Lifestyle 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 Ultrasmall-cap Profund with a short position of Multimanager Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultrasmall-cap Profund and Multimanager Lifestyle.

Diversification Opportunities for Ultrasmall-cap Profund and Multimanager Lifestyle

0.95

Correlation Coefficient

Ultrasmall-cap Profund  Multimanager Lifestyle

Almost no diversification

The 3 months correlation between Ultrasmall-cap and Multimanager is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ultrasmall Cap Profund Ultrasm and Multimanager Lifestyle Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle and Ultrasmall-cap Profund 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 Ultrasmall Cap Profund Ultrasmall Cap are associated (or correlated) with Multimanager Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimanager Lifestyle has no effect on the direction of Ultrasmall-cap Profund i.e., Ultrasmall-cap Profund and Multimanager Lifestyle go up and down completely randomly.

Pair Corralation between Ultrasmall-cap Profund and Multimanager Lifestyle

Assuming the 90 days horizon Ultrasmall Cap Profund Ultrasmall Cap is expected to generate 5.53 times more return on investment than Multimanager Lifestyle. However, Ultrasmall-cap Profund is 5.53 times more volatile than Multimanager Lifestyle Balanced. It trades about 0.09 of its potential returns per unit of risk. Multimanager Lifestyle Balanced is currently generating about 0.2 per unit of risk. If you would invest  5,561  in Ultrasmall Cap Profund Ultrasmall Cap on May 14, 2025 and sell it today you would earn a total of  628.00  from holding Ultrasmall Cap Profund Ultrasmall Cap or generate 11.29% return on investment over 90 days.

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

Ultrasmall Cap Profund Ultrasm  vs.  Multimanager Lifestyle Balance

Ultrasmall Cap Profund

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Ultrasmall Cap Profund Ultrasmall Cap are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Ultrasmall-cap Profund may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Multimanager Lifestyle

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Multimanager Lifestyle Balanced are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Multimanager Lifestyle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ultrasmall-cap Profund and Multimanager Lifestyle

The main advantage of trading using opposite Ultrasmall-cap Profund and Multimanager Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultrasmall-cap Profund position performs unexpectedly, Multimanager Lifestyle 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 Multimanager Lifestyle will offset losses from the drop in Multimanager Lifestyle's long position.

The idea behind Ultrasmall Cap Profund Ultrasmall Cap and Multimanager Lifestyle Balanced 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.