Correlation Between Muirfield Fund and Portfolio

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

By analyzing existing cross correlation between Muirfield Fund Retail and Portfolio 21 Global, you can compare the effects of market volatilities on Muirfield Fund and Portfolio 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 Muirfield Fund with a short position of Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muirfield Fund and Portfolio.

Diversification Opportunities for Muirfield Fund and Portfolio

0.37

Correlation Coefficient

Muirfield Fund  Portfolio

Weak diversification

The 3 months correlation between Muirfield and Portfolio is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Muirfield Fund Retail and Portfolio 21 Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portfolio 21 Global and Muirfield Fund 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 Muirfield Fund Retail are associated (or correlated) with Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portfolio 21 Global has no effect on the direction of Muirfield Fund i.e., Muirfield Fund and Portfolio go up and down completely randomly.

Pair Corralation between Muirfield Fund and Portfolio

Assuming the 90 days horizon Muirfield Fund Retail is expected to generate 1.29 times more return on investment than Portfolio. However, Muirfield Fund is 1.29 times more volatile than Portfolio 21 Global. It trades about 0.14 of its potential returns per unit of risk. Portfolio 21 Global is currently generating about 0.04 per unit of risk. If you would invest  1,039  in Muirfield Fund Retail on September 13, 2024 and sell it today you would earn a total of  65.00  from holding Muirfield Fund Retail or generate 6.26% return on investment over 90 days.

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

Muirfield Fund Retail  vs.  Portfolio 21 Global

Muirfield Fund Retail

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Muirfield Fund Retail are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Muirfield Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Portfolio 21 Global

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Portfolio 21 Global are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Portfolio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Muirfield Fund and Portfolio

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

The idea behind Muirfield Fund Retail and Portfolio 21 Global 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.