Correlation Between Munivest Fund and Stepstone
Can any of the company-specific risk be diversified away by investing in both Munivest Fund and Stepstone 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 Stepstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Munivest Fund and Stepstone Group, you can compare the effects of market volatilities on Munivest Fund and Stepstone 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 Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Munivest Fund and Stepstone.
Diversification Opportunities for Munivest Fund and Stepstone
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Munivest and Stepstone is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Munivest Fund and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group 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 Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Munivest Fund i.e., Munivest Fund and Stepstone go up and down completely randomly.
Pair Corralation between Munivest Fund and Stepstone
Considering the 90-day investment horizon Munivest Fund is expected to generate 7.16 times less return on investment than Stepstone. But when comparing it to its historical volatility, Munivest Fund is 3.28 times less risky than Stepstone. It trades about 0.04 of its potential returns per unit of risk. Stepstone Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,679 in Stepstone Group on August 27, 2024 and sell it today you would earn a total of 4,026 from holding Stepstone Group or generate 150.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Munivest Fund vs. Stepstone Group
Performance |
| Timeline |
| Munivest Fund |
| Stepstone Group |
Munivest Fund and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Munivest Fund and Stepstone
The main advantage of trading using opposite Munivest Fund and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Munivest Fund position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone'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 |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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