Correlation Between Manning Napier and Gotham Hedged

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

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

Diversification Opportunities for Manning Napier and Gotham Hedged

0.54

Correlation Coefficient

Manning Napier  Gotham Hedged

Very weak diversification

The 3 months correlation between Manning and Gotham is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Manning Napier Diversified and Gotham Hedged E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gotham Hedged E and Manning Napier 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 Manning Napier Diversified are associated (or correlated) with Gotham Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gotham Hedged E has no effect on the direction of Manning Napier i.e., Manning Napier and Gotham Hedged go up and down completely randomly.

Pair Corralation between Manning Napier and Gotham Hedged

Assuming the 90 days horizon Manning Napier is expected to generate 9.78 times less return on investment than Gotham Hedged. But when comparing it to its historical volatility, Manning Napier Diversified is 3.93 times less risky than Gotham Hedged. It trades about 0.1 of its potential returns per unit of risk. Gotham Hedged E is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  1,150  in Gotham Hedged E on October 27, 2024 and sell it today you would earn a total of  33.00  from holding Gotham Hedged E or generate 2.87% return on investment over 90 days.

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

Manning Napier Diversified  vs.  Gotham Hedged E

Manning Napier Diver

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Manning Napier Diversified are ranked lower than 1 (%) 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.

Gotham Hedged E

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gotham Hedged E has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Manning Napier and Gotham Hedged

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

The idea behind Manning Napier Diversified and Gotham Hedged E 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..