Correlation Between Great-west Lifetime and Great-west

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

By analyzing existing cross correlation between Great West Lifetime 2040 and Great West Sp Mid, you can compare the effects of market volatilities on Great-west Lifetime and Great-west 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 Great-west Lifetime with a short position of Great-west. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-west Lifetime and Great-west.

Diversification Opportunities for Great-west Lifetime and Great-west

0.12

Correlation Coefficient

Great-west Lifetime  Great-west

Average diversification

The 3 months correlation between Great-west and Great-west is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Great West Lifetime 2040 and Great West Sp Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Sp and Great-west Lifetime 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 Great West Lifetime 2040 are associated (or correlated) with Great-west. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Sp has no effect on the direction of Great-west Lifetime i.e., Great-west Lifetime and Great-west go up and down completely randomly.

Pair Corralation between Great-west Lifetime and Great-west

Assuming the 90 days horizon Great West Lifetime 2040 is expected to generate 0.51 times more return on investment than Great-west. However, Great West Lifetime 2040 is 1.96 times less risky than Great-west. It trades about 0.02 of its potential returns per unit of risk. Great West Sp Mid is currently generating about -0.08 per unit of risk. If you would invest  1,079  in Great West Lifetime 2040 on December 20, 2024 and sell it today you would earn a total of  7.00  from holding Great West Lifetime 2040 or generate 0.65% return on investment over 90 days.

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

Great West Lifetime 2040  vs.  Great West Sp Mid

Great West Lifetime

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Lifetime 2040 are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Great-west Lifetime is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Great West Sp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Great West Sp Mid has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic 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 Great-west Lifetime and Great-west

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

The idea behind Great West Lifetime 2040 and Great West Sp Mid 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.