Correlation Between Cmg Ultra and Multimanager Lifestyle

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

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

Diversification Opportunities for Cmg Ultra and Multimanager Lifestyle

-0.24

Correlation Coefficient

Cmg Ultra  Multimanager Lifestyle

Very good diversification

The 3 months correlation between Cmg and Multimanager is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cmg Ultra Short and Multimanager Lifestyle Moderat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle and Cmg Ultra 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 Cmg Ultra Short are associated (or correlated) with Multimanager Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimanager Lifestyle has no effect on the direction of Cmg Ultra i.e., Cmg Ultra and Multimanager Lifestyle go up and down completely randomly.

Pair Corralation between Cmg Ultra and Multimanager Lifestyle

Assuming the 90 days horizon Cmg Ultra Short is expected to generate 0.24 times more return on investment than Multimanager Lifestyle. However, Cmg Ultra Short is 4.13 times less risky than Multimanager Lifestyle. It trades about 0.24 of its potential returns per unit of risk. Multimanager Lifestyle Moderate is currently generating about 0.05 per unit of risk. If you would invest  829.00  in Cmg Ultra Short on October 24, 2024 and sell it today you would earn a total of  98.00  from holding Cmg Ultra Short or generate 11.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Cmg Ultra Short  vs.  Multimanager Lifestyle Moderat

Cmg Ultra Short

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cmg Ultra Short are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Cmg Ultra is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Multimanager Lifestyle

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Multimanager Lifestyle Moderate are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Multimanager Lifestyle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cmg Ultra and Multimanager Lifestyle

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

The idea behind Cmg Ultra Short and Multimanager Lifestyle Moderate 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.