Correlation Between Maine Municipal and Integrity Short
Can any of the company-specific risk be diversified away by investing in both Maine Municipal and Integrity Short 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 Maine Municipal and Integrity Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maine Municipal Fund and Integrity Short Term, you can compare the effects of market volatilities on Maine Municipal and Integrity Short 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 Maine Municipal with a short position of Integrity Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maine Municipal and Integrity Short.
Diversification Opportunities for Maine Municipal and Integrity Short
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maine and Integrity is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Maine Municipal Fund and Integrity Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrity Short Term and Maine Municipal 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 Maine Municipal Fund are associated (or correlated) with Integrity Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrity Short Term has no effect on the direction of Maine Municipal i.e., Maine Municipal and Integrity Short go up and down completely randomly.
Pair Corralation between Maine Municipal and Integrity Short
Assuming the 90 days horizon Maine Municipal Fund is expected to generate 2.04 times more return on investment than Integrity Short. However, Maine Municipal is 2.04 times more volatile than Integrity Short Term. It trades about 0.27 of its potential returns per unit of risk. Integrity Short Term is currently generating about 0.17 per unit of risk. If you would invest 942.00 in Maine Municipal Fund on September 1, 2024 and sell it today you would earn a total of 17.00 from holding Maine Municipal Fund or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Maine Municipal Fund vs. Integrity Short Term
Performance |
| Timeline |
| Maine Municipal |
| Integrity Short Term |
Maine Municipal and Integrity Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maine Municipal and Integrity Short
The main advantage of trading using opposite Maine Municipal and Integrity Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maine Municipal position performs unexpectedly, Integrity Short 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 Integrity Short will offset losses from the drop in Integrity Short's long position.| Maine Municipal vs. Viking Tax Free Fund | Maine Municipal vs. Viking Tax Free Fund | Maine Municipal vs. Integrity Dividend Summit | Maine Municipal vs. Integrity Dividend Summit |
| 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 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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