Correlation Between Munivest Fund and NXG NextGen
Can any of the company-specific risk be diversified away by investing in both Munivest Fund and NXG NextGen 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 NXG NextGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Munivest Fund and NXG NextGen Infrastructure, you can compare the effects of market volatilities on Munivest Fund and NXG NextGen 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 NXG NextGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Munivest Fund and NXG NextGen.
Diversification Opportunities for Munivest Fund and NXG NextGen
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Munivest and NXG is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Munivest Fund and NXG NextGen Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXG NextGen Infrastr 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 NXG NextGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXG NextGen Infrastr has no effect on the direction of Munivest Fund i.e., Munivest Fund and NXG NextGen go up and down completely randomly.
Pair Corralation between Munivest Fund and NXG NextGen
Considering the 90-day investment horizon Munivest Fund is expected to generate 10.07 times less return on investment than NXG NextGen. But when comparing it to its historical volatility, Munivest Fund is 1.74 times less risky than NXG NextGen. It trades about 0.09 of its potential returns per unit of risk. NXG NextGen Infrastructure is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 4,350 in NXG NextGen Infrastructure on August 27, 2024 and sell it today you would earn a total of 597.00 from holding NXG NextGen Infrastructure or generate 13.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Munivest Fund vs. NXG NextGen Infrastructure
Performance |
| Timeline |
| Munivest Fund |
| NXG NextGen Infrastr |
Munivest Fund and NXG NextGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Munivest Fund and NXG NextGen
The main advantage of trading using opposite Munivest Fund and NXG NextGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Munivest Fund position performs unexpectedly, NXG NextGen 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 NXG NextGen will offset losses from the drop in NXG NextGen's long position.| Munivest Fund vs. DTF Tax Free | Munivest Fund vs. MFS High Yield | Munivest Fund vs. MFS High Income | Munivest Fund vs. John Hancock Income |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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