Correlation Between Wabmsx and Multimanager Lifestyle

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

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

Diversification Opportunities for Wabmsx and Multimanager Lifestyle

1.0

Correlation Coefficient

Wabmsx  Multimanager Lifestyle

No risk reduction

The 3 months correlation between Wabmsx and Multimanager is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Wabmsx and Multimanager Lifestyle Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle and Wabmsx 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 Wabmsx 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 Wabmsx i.e., Wabmsx and Multimanager Lifestyle go up and down completely randomly.

Pair Corralation between Wabmsx and Multimanager Lifestyle

Assuming the 90 days trading horizon Wabmsx is expected to generate 1.51 times more return on investment than Multimanager Lifestyle. However, Wabmsx is 1.51 times more volatile than Multimanager Lifestyle Balanced. It trades about 0.27 of its potential returns per unit of risk. Multimanager Lifestyle Balanced is currently generating about 0.29 per unit of risk. If you would invest  1,576  in Wabmsx on May 1, 2025 and sell it today you would earn a total of  172.00  from holding Wabmsx or generate 10.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Wabmsx  vs.  Multimanager Lifestyle Balance

Wabmsx

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wabmsx are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Wabmsx may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Multimanager Lifestyle

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Multimanager Lifestyle Balanced are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Multimanager Lifestyle may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Wabmsx and Multimanager Lifestyle

The main advantage of trading using opposite Wabmsx and Multimanager Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabmsx 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 Wabmsx 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .