Correlation Between Mairs Power and Muhlenkamp Fund
Can any of the company-specific risk be diversified away by investing in both Mairs Power and Muhlenkamp 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 Mairs Power and Muhlenkamp Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Balanced and Muhlenkamp Fund Institutional, you can compare the effects of market volatilities on Mairs Power and Muhlenkamp 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 Mairs Power with a short position of Muhlenkamp Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and Muhlenkamp Fund.
Diversification Opportunities for Mairs Power and Muhlenkamp Fund
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mairs and Muhlenkamp is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Balanced and Muhlenkamp Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muhlenkamp Fund Inst and Mairs Power 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 Mairs Power Balanced are associated (or correlated) with Muhlenkamp Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muhlenkamp Fund Inst has no effect on the direction of Mairs Power i.e., Mairs Power and Muhlenkamp Fund go up and down completely randomly.
Pair Corralation between Mairs Power and Muhlenkamp Fund
Assuming the 90 days horizon Mairs Power is expected to generate 1.07 times less return on investment than Muhlenkamp Fund. But when comparing it to its historical volatility, Mairs Power Balanced is 1.62 times less risky than Muhlenkamp Fund. It trades about 0.19 of its potential returns per unit of risk. Muhlenkamp Fund Institutional is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,707 in Muhlenkamp Fund Institutional on August 26, 2024 and sell it today you would earn a total of 1,681 from holding Muhlenkamp Fund Institutional or generate 29.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Balanced vs. Muhlenkamp Fund Institutional
Performance |
| Timeline |
| Mairs Power Balanced |
| Muhlenkamp Fund Inst |
Mairs Power and Muhlenkamp Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and Muhlenkamp Fund
The main advantage of trading using opposite Mairs Power and Muhlenkamp Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power position performs unexpectedly, Muhlenkamp 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 Muhlenkamp Fund will offset losses from the drop in Muhlenkamp Fund's long position.| Mairs Power vs. Mairs Power Growth | Mairs Power vs. Mairs Power Small | Mairs Power vs. Berwyn Income Fund | Mairs Power vs. Fpa Crescent Fund |
| Muhlenkamp Fund vs. Third Avenue Value | Muhlenkamp Fund vs. Meridian Growth Fund | Muhlenkamp Fund vs. Heartland Value Fund | Muhlenkamp Fund vs. Mairs Power Growth |
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.
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