Correlation Between Driehaus Emerging and Driehaus Multi

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

By analyzing existing cross correlation between Driehaus Emerging Markets and Driehaus Multi Asset Growth, you can compare the effects of market volatilities on Driehaus Emerging and Driehaus Multi 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 Driehaus Emerging with a short position of Driehaus Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Driehaus Emerging and Driehaus Multi.

Diversification Opportunities for Driehaus Emerging and Driehaus Multi

-0.34

Correlation Coefficient

Driehaus Emerging  Driehaus Multi

Very good diversification

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

Pair Corralation between Driehaus Emerging and Driehaus Multi

Assuming the 90 days horizon Driehaus Emerging Markets is expected to under-perform the Driehaus Multi. But the mutual fund apears to be less risky and, when comparing its historical volatility, Driehaus Emerging Markets is 1.1 times less risky than Driehaus Multi. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Driehaus Multi Asset Growth is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,596  in Driehaus Multi Asset Growth on September 13, 2024 and sell it today you would earn a total of  146.00  from holding Driehaus Multi Asset Growth or generate 9.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Driehaus Emerging Markets  vs.  Driehaus Multi Asset Growth

Driehaus Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Driehaus Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Driehaus Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Driehaus Multi Asset

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Driehaus Multi Asset Growth are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Driehaus Multi may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Driehaus Emerging and Driehaus Multi

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

The idea behind Driehaus Emerging Markets and Driehaus Multi Asset Growth 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.