Correlation Between Multi Asset and 49271VAM2

Can any of the company-specific risk be diversified away by investing in both Multi Asset and 49271VAM2 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 49271VAM2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Multi Asset Real Return and KDP 335 15 MAR 51, you can compare the effects of market volatilities on Multi Asset and 49271VAM2 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 49271VAM2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Asset and 49271VAM2.

Diversification Opportunities for Multi Asset and 49271VAM2

-0.56

Correlation Coefficient

Multi Asset  49271VAM2

Excellent diversification

The 3 months correlation between Multi and 49271VAM2 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Multi Asset Real Return and KDP 335 15 MAR 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KDP 335 15 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 Real Return are associated (or correlated) with 49271VAM2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KDP 335 15 has no effect on the direction of Multi Asset i.e., Multi Asset and 49271VAM2 go up and down completely randomly.

Pair Corralation between Multi Asset and 49271VAM2

Assuming the 90 days horizon Multi Asset Real Return is expected to generate 1.52 times more return on investment than 49271VAM2. However, Multi Asset is 1.52 times more volatile than KDP 335 15 MAR 51. It trades about 0.09 of its potential returns per unit of risk. KDP 335 15 MAR 51 is currently generating about -0.19 per unit of risk. If you would invest  2,160  in Multi Asset Real Return on September 28, 2024 and sell it today you would earn a total of  168.00  from holding Multi Asset Real Return or generate 7.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	67.74%
Values	Daily Returns

Multi Asset Real Return  vs.  KDP 335 15 MAR 51

Multi Asset Real

Risk-Adjusted Performance

7 of 100

OK

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

KDP 335 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KDP 335 15 MAR 51 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for KDP 335 15 MAR 51 investors.

Pair Trading with Multi Asset and 49271VAM2

The main advantage of trading using opposite Multi Asset and 49271VAM2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Asset position performs unexpectedly, 49271VAM2 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 49271VAM2 will offset losses from the drop in 49271VAM2's long position.

The idea behind Multi Asset Real Return and KDP 335 15 MAR 51 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.