Correlation Between Muhlenkamp Fund and Fam Equity-income
Can any of the company-specific risk be diversified away by investing in both Muhlenkamp Fund and Fam Equity-income 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 Muhlenkamp Fund and Fam Equity-income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Muhlenkamp Fund Institutional and Fam Equity Income Fund, you can compare the effects of market volatilities on Muhlenkamp Fund and Fam Equity-income 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 Muhlenkamp Fund with a short position of Fam Equity-income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muhlenkamp Fund and Fam Equity-income.
Diversification Opportunities for Muhlenkamp Fund and Fam Equity-income
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Muhlenkamp and Fam is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Muhlenkamp Fund Institutional and Fam Equity Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fam Equity Income and Muhlenkamp 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 Muhlenkamp Fund Institutional are associated (or correlated) with Fam Equity-income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fam Equity Income has no effect on the direction of Muhlenkamp Fund i.e., Muhlenkamp Fund and Fam Equity-income go up and down completely randomly.
Pair Corralation between Muhlenkamp Fund and Fam Equity-income
Assuming the 90 days horizon Muhlenkamp Fund Institutional is expected to generate 1.01 times more return on investment than Fam Equity-income. However, Muhlenkamp Fund is 1.01 times more volatile than Fam Equity Income Fund. It trades about 0.15 of its potential returns per unit of risk. Fam Equity Income Fund is currently generating about 0.13 per unit of risk. If you would invest 6,895 in Muhlenkamp Fund Institutional on September 5, 2024 and sell it today you would earn a total of 482.00 from holding Muhlenkamp Fund Institutional or generate 6.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Muhlenkamp Fund Institutional vs. Fam Equity Income Fund
Performance |
Timeline |
Muhlenkamp Fund Inst |
Fam Equity Income |
Muhlenkamp Fund and Fam Equity-income Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Muhlenkamp Fund and Fam Equity-income
The main advantage of trading using opposite Muhlenkamp Fund and Fam Equity-income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muhlenkamp Fund position performs unexpectedly, Fam Equity-income 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 Fam Equity-income will offset losses from the drop in Fam Equity-income's long position.Muhlenkamp Fund vs. Third Avenue Value | Muhlenkamp Fund vs. Meridian Growth Fund | Muhlenkamp Fund vs. Heartland Value Fund | Muhlenkamp Fund vs. Mairs Power Growth |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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