Correlation Between Multimanager Lifestyle and Brandes E

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

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

Diversification Opportunities for Multimanager Lifestyle and Brandes E

-0.42

Correlation Coefficient

Multimanager Lifestyle  Brandes E

Very good diversification

The 3 months correlation between Multimanager and Brandes is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Multimanager Lifestyle Growth and Brandes E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes E Plus and Multimanager Lifestyle 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 Multimanager Lifestyle Growth are associated (or correlated) with Brandes E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes E Plus has no effect on the direction of Multimanager Lifestyle i.e., Multimanager Lifestyle and Brandes E go up and down completely randomly.

Pair Corralation between Multimanager Lifestyle and Brandes E

Assuming the 90 days horizon Multimanager Lifestyle Growth is expected to generate 1.86 times more return on investment than Brandes E. However, Multimanager Lifestyle is 1.86 times more volatile than Brandes E Plus. It trades about 0.13 of its potential returns per unit of risk. Brandes E Plus is currently generating about -0.11 per unit of risk. If you would invest  1,435  in Multimanager Lifestyle Growth on September 13, 2024 and sell it today you would earn a total of  61.00  from holding Multimanager Lifestyle Growth or generate 4.25% return on investment over 90 days.

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

Multimanager Lifestyle Growth  vs.  Brandes E Plus

Multimanager Lifestyle

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Multimanager Lifestyle Growth are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Multimanager Lifestyle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Brandes E Plus

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Multimanager Lifestyle and Brandes E

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

The idea behind Multimanager Lifestyle Growth and Brandes E Plus 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.