Correlation Between Mirova International and Multimanager Lifestyle

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

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

Diversification Opportunities for Mirova International and Multimanager Lifestyle

0.88

Correlation Coefficient

Mirova International  Multimanager Lifestyle

Very poor diversification

The 3 months correlation between Mirova and Multimanager is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mirova International Sustainab and Multimanager Lifestyle Servati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle and Mirova International 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 Mirova International Sustainable 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 Mirova International i.e., Mirova International and Multimanager Lifestyle go up and down completely randomly.

Pair Corralation between Mirova International and Multimanager Lifestyle

Assuming the 90 days horizon Mirova International Sustainable is expected to generate 3.89 times more return on investment than Multimanager Lifestyle. However, Mirova International is 3.89 times more volatile than Multimanager Lifestyle Servative. It trades about 0.14 of its potential returns per unit of risk. Multimanager Lifestyle Servative is currently generating about 0.11 per unit of risk. If you would invest  1,201  in Mirova International Sustainable on December 22, 2024 and sell it today you would earn a total of  97.00  from holding Mirova International Sustainable or generate 8.08% return on investment over 90 days.

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

Mirova International Sustainab  vs.  Multimanager Lifestyle Servati

Mirova International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mirova International Sustainable are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Mirova International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Multimanager Lifestyle

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Multimanager Lifestyle Servative are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong 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.

Pair Trading with Mirova International and Multimanager Lifestyle

The main advantage of trading using opposite Mirova International and Multimanager Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirova International 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 Mirova International Sustainable and Multimanager Lifestyle Servative 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.