Correlation Between Morningstar Aggressive and Manning Napier

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

By analyzing existing cross correlation between Morningstar Aggressive Growth and Manning Napier Overseas, you can compare the effects of market volatilities on Morningstar Aggressive 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 Morningstar Aggressive with a short position of Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morningstar Aggressive and Manning Napier.

Diversification Opportunities for Morningstar Aggressive and Manning Napier

0.82

Correlation Coefficient

Morningstar Aggressive  Manning Napier

Very poor diversification

The 3 months correlation between Morningstar and Manning is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Morningstar Aggressive Growth and Manning Napier Overseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Overseas and Morningstar Aggressive 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 Morningstar Aggressive Growth 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 Overseas has no effect on the direction of Morningstar Aggressive i.e., Morningstar Aggressive and Manning Napier go up and down completely randomly.

Pair Corralation between Morningstar Aggressive and Manning Napier

Assuming the 90 days horizon Morningstar Aggressive Growth is expected to under-perform the Manning Napier. But the mutual fund apears to be less risky and, when comparing its historical volatility, Morningstar Aggressive Growth is 1.08 times less risky than Manning Napier. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Manning Napier Overseas is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,353  in Manning Napier Overseas on December 4, 2024 and sell it today you would earn a total of  94.00  from holding Manning Napier Overseas or generate 2.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Morningstar Aggressive Growth  vs.  Manning Napier Overseas

Morningstar Aggressive

Risk-Adjusted Performance

Very Weak

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

Manning Napier Overseas

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Manning Napier Overseas are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Manning Napier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Morningstar Aggressive and Manning Napier

The main advantage of trading using opposite Morningstar Aggressive and Manning Napier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morningstar Aggressive 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 Morningstar Aggressive Growth and Manning Napier Overseas 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.