Correlation Between Munivest Fund and New America

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

By analyzing existing cross correlation between Munivest Fund and New America High, you can compare the effects of market volatilities on Munivest Fund and New America 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 Munivest Fund with a short position of New America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Munivest Fund and New America.

Diversification Opportunities for Munivest Fund and New America

0.45

Correlation Coefficient

Munivest Fund  New America

Very weak diversification

The 3 months correlation between Munivest and New is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Munivest Fund and New America High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New America High and Munivest 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 Munivest Fund are associated (or correlated) with New America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New America High has no effect on the direction of Munivest Fund i.e., Munivest Fund and New America go up and down completely randomly.

Pair Corralation between Munivest Fund and New America

Considering the 90-day investment horizon Munivest Fund is expected to under-perform the New America. In addition to that, Munivest Fund is 1.47 times more volatile than New America High. It trades about -0.08 of its total potential returns per unit of risk. New America High is currently generating about 0.05 per unit of volatility. If you would invest  820.00  in New America High on September 14, 2024 and sell it today you would earn a total of  12.00  from holding New America High or generate 1.46% return on investment over 90 days.

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

Munivest Fund  vs.  New America High

Munivest Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Munivest Fund has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Munivest Fund is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

New America High

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in New America High are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, New America is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Munivest Fund and New America

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

The idea behind Munivest Fund and New America High 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.