Correlation Between Muhlenkamp Fund and Selected American
Can any of the company-specific risk be diversified away by investing in both Muhlenkamp Fund and Selected American 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 Selected American 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 Selected American Shares, you can compare the effects of market volatilities on Muhlenkamp Fund and Selected American 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 Selected American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muhlenkamp Fund and Selected American.
Diversification Opportunities for Muhlenkamp Fund and Selected American
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Muhlenkamp and Selected is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Muhlenkamp Fund Institutional and Selected American Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selected American Shares 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 Selected American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selected American Shares has no effect on the direction of Muhlenkamp Fund i.e., Muhlenkamp Fund and Selected American go up and down completely randomly.
Pair Corralation between Muhlenkamp Fund and Selected American
Assuming the 90 days horizon Muhlenkamp Fund Institutional is expected to generate 0.83 times more return on investment than Selected American. However, Muhlenkamp Fund Institutional is 1.2 times less risky than Selected American. It trades about 0.21 of its potential returns per unit of risk. Selected American Shares is currently generating about 0.16 per unit of risk. If you would invest 7,097 in Muhlenkamp Fund Institutional on August 26, 2024 and sell it today you would earn a total of 300.00 from holding Muhlenkamp Fund Institutional or generate 4.23% 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. Selected American Shares
Performance |
| Timeline |
| Muhlenkamp Fund Inst |
| Selected American Shares |
Muhlenkamp Fund and Selected American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muhlenkamp Fund and Selected American
The main advantage of trading using opposite Muhlenkamp Fund and Selected American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muhlenkamp Fund position performs unexpectedly, Selected American 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 Selected American will offset losses from the drop in Selected American'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 |
| Selected American vs. Marsico Focus Fund | Selected American vs. Artisan International Fund | Selected American vs. Third Avenue Value | Selected American vs. William Blair International |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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