Correlation Between Largecap and Crawford Multi

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

By analyzing existing cross correlation between Largecap Sp 500 and Crawford Multi Asset Income, you can compare the effects of market volatilities on Largecap and Crawford Multi 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 Largecap with a short position of Crawford Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Largecap and Crawford Multi.

Diversification Opportunities for Largecap and Crawford Multi

0.25

Correlation Coefficient

Largecap  Crawford Multi

Modest diversification

The 3 months correlation between Largecap and Crawford is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Largecap Sp 500 and Crawford Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crawford Multi Asset and Largecap 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 Largecap Sp 500 are associated (or correlated) with Crawford Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crawford Multi Asset has no effect on the direction of Largecap i.e., Largecap and Crawford Multi go up and down completely randomly.

Pair Corralation between Largecap and Crawford Multi

Assuming the 90 days horizon Largecap Sp 500 is expected to generate 1.66 times more return on investment than Crawford Multi. However, Largecap is 1.66 times more volatile than Crawford Multi Asset Income. It trades about -0.18 of its potential returns per unit of risk. Crawford Multi Asset Income is currently generating about -0.41 per unit of risk. If you would invest  2,949  in Largecap Sp 500 on September 23, 2024 and sell it today you would lose (95.00) from holding Largecap Sp 500 or give up 3.22% of portfolio value over 90 days.

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

Largecap Sp 500  vs.  Crawford Multi Asset Income

Largecap Sp 500

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Largecap Sp 500 are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Largecap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Crawford Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crawford Multi Asset Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Crawford Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Largecap and Crawford Multi

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

The idea behind Largecap Sp 500 and Crawford Multi Asset Income 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.