Correlation Between Integrity Short and Maine Municipal
Can any of the company-specific risk be diversified away by investing in both Integrity Short and Maine Municipal 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 Integrity Short and Maine Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrity Short Term and Maine Municipal Fund, you can compare the effects of market volatilities on Integrity Short and Maine Municipal 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 Integrity Short with a short position of Maine Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrity Short and Maine Municipal.
Diversification Opportunities for Integrity Short and Maine Municipal
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Integrity and Maine is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Integrity Short Term and Maine Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maine Municipal and Integrity Short 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 Integrity Short Term are associated (or correlated) with Maine Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maine Municipal has no effect on the direction of Integrity Short i.e., Integrity Short and Maine Municipal go up and down completely randomly.
Pair Corralation between Integrity Short and Maine Municipal
Assuming the 90 days horizon Integrity Short Term is expected to under-perform the Maine Municipal. But the mutual fund apears to be less risky and, when comparing its historical volatility, Integrity Short Term is 2.58 times less risky than Maine Municipal. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Maine Municipal Fund is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 957.00 in Maine Municipal Fund on August 25, 2024 and sell it today you would lose (6.00) from holding Maine Municipal Fund or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrity Short Term vs. Maine Municipal Fund
Performance |
| Timeline |
| Integrity Short Term |
| Maine Municipal |
Integrity Short and Maine Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrity Short and Maine Municipal
The main advantage of trading using opposite Integrity Short and Maine Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrity Short position performs unexpectedly, Maine Municipal 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 Maine Municipal will offset losses from the drop in Maine Municipal's long position.| Integrity Short vs. Viking Tax Free Fund | Integrity Short vs. Viking Tax Free Fund | Integrity Short vs. Viking Tax Free Fund | Integrity Short vs. Viking Tax Free Fund |
| Maine Municipal vs. Viking Tax Free Fund | Maine Municipal vs. Viking Tax Free Fund | Maine Municipal vs. Viking Tax Free Fund | Maine Municipal vs. Viking Tax Free Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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