Correlation Between Multi Manager and Northern Short
Can any of the company-specific risk be diversified away by investing in both Multi Manager and Northern Short 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 Multi Manager and Northern Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Manager Global Listed and Northern Short Intermediate Government, you can compare the effects of market volatilities on Multi Manager and Northern Short 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 Multi Manager with a short position of Northern Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Northern Short.
Diversification Opportunities for Multi Manager and Northern Short
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and Northern is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager Global Listed and Northern Short Intermediate Go in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Short Inter and Multi Manager 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 Multi Manager Global Listed are associated (or correlated) with Northern Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Short Inter has no effect on the direction of Multi Manager i.e., Multi Manager and Northern Short go up and down completely randomly.
Pair Corralation between Multi Manager and Northern Short
Assuming the 90 days horizon Multi Manager Global Listed is expected to under-perform the Northern Short. In addition to that, Multi Manager is 3.84 times more volatile than Northern Short Intermediate Government. It trades about -0.27 of its total potential returns per unit of risk. Northern Short Intermediate Government is currently generating about -0.11 per unit of volatility. If you would invest 940.00 in Northern Short Intermediate Government on September 23, 2024 and sell it today you would lose (12.00) from holding Northern Short Intermediate Government or give up 1.28% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Multi Manager Global Listed vs. Northern Short Intermediate Go
Performance |
Timeline |
Multi Manager Global |
Northern Short Inter |
Multi Manager and Northern Short Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Multi Manager and Northern Short
The main advantage of trading using opposite Multi Manager and Northern Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager position performs unexpectedly, Northern Short 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 Northern Short will offset losses from the drop in Northern Short's long position.Multi Manager vs. Northern Bond Index | Multi Manager vs. Northern E Bond | Multi Manager vs. Northern Arizona Tax Exempt | Multi Manager vs. Northern Emerging Markets |
Northern Short vs. Dana Large Cap | Northern Short vs. Pace Large Value | Northern Short vs. Transamerica Large Cap | Northern Short vs. Aqr Large Cap |
Check out your portfolio center.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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |