Correlation Between Muhlenkamp Fund and Mairs Power
Can any of the company-specific risk be diversified away by investing in both Muhlenkamp Fund and Mairs Power 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 Mairs Power 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 Mairs Power Balanced, you can compare the effects of market volatilities on Muhlenkamp Fund and Mairs Power 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 Mairs Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muhlenkamp Fund and Mairs Power.
Diversification Opportunities for Muhlenkamp Fund and Mairs Power
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Muhlenkamp and Mairs is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Muhlenkamp Fund Institutional and Mairs Power Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mairs Power Balanced 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 Mairs Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mairs Power Balanced has no effect on the direction of Muhlenkamp Fund i.e., Muhlenkamp Fund and Mairs Power go up and down completely randomly.
Pair Corralation between Muhlenkamp Fund and Mairs Power
Assuming the 90 days horizon Muhlenkamp Fund Institutional is expected to generate 1.62 times more return on investment than Mairs Power. However, Muhlenkamp Fund is 1.62 times more volatile than Mairs Power Balanced. It trades about 0.12 of its potential returns per unit of risk. Mairs Power Balanced is currently generating about 0.19 per unit of risk. 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 |
Muhlenkamp Fund Institutional vs. Mairs Power Balanced
Performance |
| Timeline |
| Muhlenkamp Fund Inst |
| Mairs Power Balanced |
Muhlenkamp Fund and Mairs Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muhlenkamp Fund and Mairs Power
The main advantage of trading using opposite Muhlenkamp Fund and Mairs Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muhlenkamp Fund position performs unexpectedly, Mairs Power 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 Mairs Power will offset losses from the drop in Mairs Power'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 |
| Mairs Power vs. Mairs Power Growth | Mairs Power vs. Mairs Power Small | Mairs Power vs. Berwyn Income Fund | Mairs Power vs. Fpa Crescent 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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