Correlation Between Muhlenkamp Fund and Madison Mid
Can any of the company-specific risk be diversified away by investing in both Muhlenkamp Fund and Madison Mid 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 Muhlenkamp Fund and Madison Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Muhlenkamp Fund Institutional and Madison Mid Cap, you can compare the effects of market volatilities on Muhlenkamp Fund and Madison Mid 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 Muhlenkamp Fund with a short position of Madison Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muhlenkamp Fund and Madison Mid.
Diversification Opportunities for Muhlenkamp Fund and Madison Mid
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Muhlenkamp and Madison is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Muhlenkamp Fund Institutional and Madison Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Mid Cap and Muhlenkamp 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 Muhlenkamp Fund Institutional are associated (or correlated) with Madison Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Mid Cap has no effect on the direction of Muhlenkamp Fund i.e., Muhlenkamp Fund and Madison Mid go up and down completely randomly.
Pair Corralation between Muhlenkamp Fund and Madison Mid
Assuming the 90 days horizon Muhlenkamp Fund is expected to generate 1.68 times less return on investment than Madison Mid. But when comparing it to its historical volatility, Muhlenkamp Fund Institutional is 1.2 times less risky than Madison Mid. It trades about 0.18 of its potential returns per unit of risk. Madison Mid Cap is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,746 in Madison Mid Cap on August 28, 2024 and sell it today you would earn a total of 113.00 from holding Madison Mid Cap or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Muhlenkamp Fund Institutional vs. Madison Mid Cap
Performance |
| Timeline |
| Muhlenkamp Fund Inst |
| Madison Mid Cap |
Muhlenkamp Fund and Madison Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muhlenkamp Fund and Madison Mid
The main advantage of trading using opposite Muhlenkamp Fund and Madison Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muhlenkamp Fund position performs unexpectedly, Madison Mid 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 Madison Mid will offset losses from the drop in Madison Mid's long position.| Muhlenkamp Fund vs. Third Avenue Value | Muhlenkamp Fund vs. Meridian Growth Fund | Muhlenkamp Fund vs. Heartland Value Fund | Muhlenkamp Fund vs. Mairs Power Growth |
| Madison Mid vs. Pro Blend Extended Term | Madison Mid vs. Fam Value Fund | Madison Mid vs. Common Stock Fund | Madison Mid vs. Meridian Trarian 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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