Correlation Between Applied Finance and Maingate Mlp

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Can any of the company-specific risk be diversified away by investing in both Applied Finance and Maingate Mlp 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 Applied Finance and Maingate Mlp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Maingate Mlp Fund, you can compare the effects of market volatilities on Applied Finance and Maingate Mlp 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 Applied Finance with a short position of Maingate Mlp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Maingate Mlp.

Diversification Opportunities for Applied Finance and Maingate Mlp

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Applied and Maingate is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Maingate Mlp Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maingate Mlp and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Maingate Mlp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maingate Mlp has no effect on the direction of Applied Finance i.e., Applied Finance and Maingate Mlp go up and down completely randomly.

Pair Corralation between Applied Finance and Maingate Mlp

Assuming the 90 days horizon Applied Finance is expected to generate 1.61 times less return on investment than Maingate Mlp. In addition to that, Applied Finance is 1.51 times more volatile than Maingate Mlp Fund. It trades about 0.26 of its total potential returns per unit of risk. Maingate Mlp Fund is currently generating about 0.63 per unit of volatility. If you would invest  958.00  in Maingate Mlp Fund on September 1, 2024 and sell it today you would earn a total of  136.00  from holding Maingate Mlp Fund or generate 14.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.45%
ValuesDaily Returns

Applied Finance Explorer  vs.  Maingate Mlp Fund

 Performance 
       Timeline  
Applied Finance Explorer 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Applied Finance Explorer are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Applied Finance may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Maingate Mlp 

Risk-Adjusted Performance

24 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Maingate Mlp Fund are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Maingate Mlp showed solid returns over the last few months and may actually be approaching a breakup point.

Applied Finance and Maingate Mlp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Applied Finance and Maingate Mlp

The main advantage of trading using opposite Applied Finance and Maingate Mlp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, Maingate Mlp 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 Maingate Mlp will offset losses from the drop in Maingate Mlp's long position.
The idea behind Applied Finance Explorer and Maingate Mlp Fund 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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