Correlation Between NXG NextGen and Munivest Fund
Can any of the company-specific risk be diversified away by investing in both NXG NextGen and Munivest Fund 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 NXG NextGen and Munivest Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NXG NextGen Infrastructure and Munivest Fund, you can compare the effects of market volatilities on NXG NextGen and Munivest Fund 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 NXG NextGen with a short position of Munivest Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of NXG NextGen and Munivest Fund.
Diversification Opportunities for NXG NextGen and Munivest Fund
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NXG and Munivest is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding NXG NextGen Infrastructure and Munivest Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Munivest Fund and NXG NextGen 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 NXG NextGen Infrastructure are associated (or correlated) with Munivest Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Munivest Fund has no effect on the direction of NXG NextGen i.e., NXG NextGen and Munivest Fund go up and down completely randomly.
Pair Corralation between NXG NextGen and Munivest Fund
Considering the 90-day investment horizon NXG NextGen Infrastructure is expected to generate 2.59 times more return on investment than Munivest Fund. However, NXG NextGen is 2.59 times more volatile than Munivest Fund. It trades about 0.66 of its potential returns per unit of risk. Munivest Fund is currently generating about 0.16 per unit of risk. If you would invest 4,028 in NXG NextGen Infrastructure on October 20, 2024 and sell it today you would earn a total of 1,031 from holding NXG NextGen Infrastructure or generate 25.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
NXG NextGen Infrastructure vs. Munivest Fund
Performance |
| Timeline |
| NXG NextGen Infrastr |
| Munivest Fund |
NXG NextGen and Munivest Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NXG NextGen and Munivest Fund
The main advantage of trading using opposite NXG NextGen and Munivest Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NXG NextGen position performs unexpectedly, Munivest Fund 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 Munivest Fund will offset losses from the drop in Munivest Fund's long position.| NXG NextGen vs. MFS Investment Grade | NXG NextGen vs. Eaton Vance National | NXG NextGen vs. Nuveen California Select | NXG NextGen vs. Federated Premier Municipal |
| Munivest Fund vs. Blackrock Muniyield Quality | Munivest Fund vs. Blackrock Muniyield Quality | Munivest Fund vs. Blackrock Muniholdings Closed | Munivest Fund vs. Blackrock Muniholdings Quality |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |