Correlation Between Muirfield Fund and Infrastructure Fund
Can any of the company-specific risk be diversified away by investing in both Muirfield Fund and Infrastructure Fund 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 Infrastructure Fund 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 Infrastructure Fund Retail, you can compare the effects of market volatilities on Muirfield Fund and Infrastructure Fund 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 Infrastructure Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muirfield Fund and Infrastructure Fund.
Diversification Opportunities for Muirfield Fund and Infrastructure Fund
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MUIRFIELD and Infrastructure is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Muirfield Fund Retail and Infrastructure Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrastructure Fund 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 Infrastructure Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrastructure Fund has no effect on the direction of Muirfield Fund i.e., Muirfield Fund and Infrastructure Fund go up and down completely randomly.
Pair Corralation between Muirfield Fund and Infrastructure Fund
Assuming the 90 days horizon Muirfield Fund Retail is expected to generate 2.56 times more return on investment than Infrastructure Fund. However, Muirfield Fund is 2.56 times more volatile than Infrastructure Fund Retail. It trades about 0.07 of its potential returns per unit of risk. Infrastructure Fund Retail is currently generating about 0.11 per unit of risk. If you would invest 1,013 in Muirfield Fund Retail on September 3, 2024 and sell it today you would earn a total of 79.00 from holding Muirfield Fund Retail or generate 7.8% 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. Infrastructure Fund Retail
Performance |
| Timeline |
| Muirfield Fund Retail |
| Infrastructure Fund |
Muirfield Fund and Infrastructure Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muirfield Fund and Infrastructure Fund
The main advantage of trading using opposite Muirfield Fund and Infrastructure Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muirfield Fund position performs unexpectedly, Infrastructure Fund 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 Infrastructure Fund will offset losses from the drop in Infrastructure Fund's long position.| Muirfield Fund vs. Quantex Fund Retail | Muirfield Fund vs. Infrastructure Fund Retail | Muirfield Fund vs. Dynamic Growth Fund | Muirfield Fund vs. Balanced Fund Retail |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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