Correlation Between Muhlenkamp Fund and Thompson Largecap
Can any of the company-specific risk be diversified away by investing in both Muhlenkamp Fund and Thompson Largecap 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 Thompson Largecap 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 Thompson Largecap Fund, you can compare the effects of market volatilities on Muhlenkamp Fund and Thompson Largecap 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 Thompson Largecap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muhlenkamp Fund and Thompson Largecap.
Diversification Opportunities for Muhlenkamp Fund and Thompson Largecap
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Muhlenkamp and Thompson is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Muhlenkamp Fund Institutional and Thompson Largecap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thompson Largecap 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 Thompson Largecap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thompson Largecap has no effect on the direction of Muhlenkamp Fund i.e., Muhlenkamp Fund and Thompson Largecap go up and down completely randomly.
Pair Corralation between Muhlenkamp Fund and Thompson Largecap
Assuming the 90 days horizon Muhlenkamp Fund is expected to generate 1.26 times less return on investment than Thompson Largecap. But when comparing it to its historical volatility, Muhlenkamp Fund Institutional is 1.27 times less risky than Thompson Largecap. It trades about 0.07 of its potential returns per unit of risk. Thompson Largecap Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,588 in Thompson Largecap Fund on August 29, 2024 and sell it today you would earn a total of 3,004 from holding Thompson Largecap Fund or generate 34.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Muhlenkamp Fund Institutional vs. Thompson Largecap Fund
Performance |
| Timeline |
| Muhlenkamp Fund Inst |
| Thompson Largecap |
Muhlenkamp Fund and Thompson Largecap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muhlenkamp Fund and Thompson Largecap
The main advantage of trading using opposite Muhlenkamp Fund and Thompson Largecap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muhlenkamp Fund position performs unexpectedly, Thompson Largecap 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 Thompson Largecap will offset losses from the drop in Thompson Largecap's long position.| Muhlenkamp Fund vs. Dodge Cox Stock | Muhlenkamp Fund vs. American Mutual Fund | Muhlenkamp Fund vs. American Funds American | Muhlenkamp Fund vs. American Funds American |
| Thompson Largecap vs. Clipper Fund Inc | Thompson Largecap vs. Meridian Trarian Fund | Thompson Largecap vs. Meridian Growth Fund | Thompson Largecap vs. Muhlenkamp Fund Institutional |
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 Stocks Directory module to find actively traded stocks across global markets.
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