Correlation Between Copeland Risk and Multi Index

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

By analyzing existing cross correlation between Copeland Risk Managed and Multi Index 2015 Lifetime, you can compare the effects of market volatilities on Copeland Risk and Multi Index 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 Copeland Risk with a short position of Multi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copeland Risk and Multi Index.

Diversification Opportunities for Copeland Risk and Multi Index

0.34

Correlation Coefficient

Copeland Risk  Multi Index

Weak diversification

The 3 months correlation between Copeland and Multi is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Copeland Risk Managed and Multi Index 2015 Lifetime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Index 2015 and Copeland Risk 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 Copeland Risk Managed are associated (or correlated) with Multi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Index 2015 has no effect on the direction of Copeland Risk i.e., Copeland Risk and Multi Index go up and down completely randomly.

Pair Corralation between Copeland Risk and Multi Index

Assuming the 90 days horizon Copeland Risk is expected to generate 1.41 times less return on investment than Multi Index. In addition to that, Copeland Risk is 2.56 times more volatile than Multi Index 2015 Lifetime. It trades about 0.02 of its total potential returns per unit of risk. Multi Index 2015 Lifetime is currently generating about 0.08 per unit of volatility. If you would invest  902.00  in Multi Index 2015 Lifetime on September 22, 2024 and sell it today you would earn a total of  157.00  from holding Multi Index 2015 Lifetime or generate 17.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Copeland Risk Managed  vs.  Multi Index 2015 Lifetime

Copeland Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copeland Risk Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Multi Index 2015

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Multi Index 2015 Lifetime has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Multi Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Copeland Risk and Multi Index

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

The idea behind Copeland Risk Managed and Multi Index 2015 Lifetime 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.