Correlation Between Munivest Fund and Burford Capital
Can any of the company-specific risk be diversified away by investing in both Munivest Fund and Burford Capital 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 Munivest Fund and Burford Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Munivest Fund and Burford Capital, you can compare the effects of market volatilities on Munivest Fund and Burford Capital 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 Munivest Fund with a short position of Burford Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Munivest Fund and Burford Capital.
Diversification Opportunities for Munivest Fund and Burford Capital
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Munivest and Burford is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Munivest Fund and Burford Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burford Capital and Munivest 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 Munivest Fund are associated (or correlated) with Burford Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burford Capital has no effect on the direction of Munivest Fund i.e., Munivest Fund and Burford Capital go up and down completely randomly.
Pair Corralation between Munivest Fund and Burford Capital
Considering the 90-day investment horizon Munivest Fund is expected to generate 6.18 times less return on investment than Burford Capital. But when comparing it to its historical volatility, Munivest Fund is 3.34 times less risky than Burford Capital. It trades about 0.08 of its potential returns per unit of risk. Burford Capital is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,314 in Burford Capital on November 5, 2024 and sell it today you would earn a total of 90.00 from holding Burford Capital or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Munivest Fund vs. Burford Capital
Performance |
| Timeline |
| Munivest Fund |
| Burford Capital |
Munivest Fund and Burford Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Munivest Fund and Burford Capital
The main advantage of trading using opposite Munivest Fund and Burford Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Munivest Fund position performs unexpectedly, Burford Capital 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 Burford Capital will offset losses from the drop in Burford Capital's long position.| Munivest Fund vs. Blackrock Muniyield Quality | Munivest Fund vs. Blackrock Muniyield Quality | Munivest Fund vs. Blackrock Muniholdings Closed | Munivest Fund vs. Blackrock Muniholdings Quality |
| Burford Capital vs. Franklin Templeton Limited | Burford Capital vs. Blackrock Muni Intermediate | Burford Capital vs. Munivest Fund | Burford Capital vs. Blackrock Floating Rate |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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