Correlation Between Multisector Bond and Manning Napier
Can any of the company-specific risk be diversified away by investing in both Multisector Bond and Manning Napier 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 Multisector Bond and Manning Napier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and Manning Napier Callodine, you can compare the effects of market volatilities on Multisector Bond and Manning Napier 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 Multisector Bond with a short position of Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Manning Napier.
Diversification Opportunities for Multisector Bond and Manning Napier
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Multisector and Manning is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma and Manning Napier Callodine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Callodine and Multisector Bond 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 Multisector Bond Sma are associated (or correlated) with Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier Callodine has no effect on the direction of Multisector Bond i.e., Multisector Bond and Manning Napier go up and down completely randomly.
Pair Corralation between Multisector Bond and Manning Napier
Assuming the 90 days horizon Multisector Bond is expected to generate 8.09 times less return on investment than Manning Napier. But when comparing it to its historical volatility, Multisector Bond Sma is 3.23 times less risky than Manning Napier. It trades about 0.08 of its potential returns per unit of risk. Manning Napier Callodine is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,394 in Manning Napier Callodine on September 10, 2024 and sell it today you would earn a total of 158.00 from holding Manning Napier Callodine or generate 11.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Multisector Bond Sma vs. Manning Napier Callodine
Performance |
Timeline |
Multisector Bond Sma |
Manning Napier Callodine |
Multisector Bond and Manning Napier Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Multisector Bond and Manning Napier
The main advantage of trading using opposite Multisector Bond and Manning Napier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond position performs unexpectedly, Manning Napier 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 Manning Napier will offset losses from the drop in Manning Napier's long position.The idea behind Multisector Bond Sma and Manning Napier Callodine 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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Check out your portfolio center.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 .
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