Correlation Between Nasdaq-100 Fund and Muhlenkamp Fund
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100 Fund and Muhlenkamp 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 Nasdaq-100 Fund and Muhlenkamp Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Fund Investor and Muhlenkamp Fund Institutional, you can compare the effects of market volatilities on Nasdaq-100 Fund and Muhlenkamp 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 Nasdaq-100 Fund with a short position of Muhlenkamp Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100 Fund and Muhlenkamp Fund.
Diversification Opportunities for Nasdaq-100 Fund and Muhlenkamp Fund
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NASDAQ-100 and Muhlenkamp is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Fund Investor and Muhlenkamp Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muhlenkamp Fund Inst and Nasdaq-100 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 Nasdaq 100 Fund Investor are associated (or correlated) with Muhlenkamp Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muhlenkamp Fund Inst has no effect on the direction of Nasdaq-100 Fund i.e., Nasdaq-100 Fund and Muhlenkamp Fund go up and down completely randomly.
Pair Corralation between Nasdaq-100 Fund and Muhlenkamp Fund
Assuming the 90 days horizon Nasdaq 100 Fund Investor is expected to generate 1.39 times more return on investment than Muhlenkamp Fund. However, Nasdaq-100 Fund is 1.39 times more volatile than Muhlenkamp Fund Institutional. It trades about 0.1 of its potential returns per unit of risk. Muhlenkamp Fund Institutional is currently generating about 0.11 per unit of risk. If you would invest 6,716 in Nasdaq 100 Fund Investor on August 26, 2024 and sell it today you would earn a total of 1,986 from holding Nasdaq 100 Fund Investor or generate 29.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Fund Investor vs. Muhlenkamp Fund Institutional
Performance |
| Timeline |
| Nasdaq 100 Fund |
| Muhlenkamp Fund Inst |
Nasdaq-100 Fund and Muhlenkamp Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100 Fund and Muhlenkamp Fund
The main advantage of trading using opposite Nasdaq-100 Fund and Muhlenkamp Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100 Fund position performs unexpectedly, Muhlenkamp 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 Muhlenkamp Fund will offset losses from the drop in Muhlenkamp Fund's long position.| Nasdaq-100 Fund vs. Aqr Large Cap | Nasdaq-100 Fund vs. Gmo Equity Allocation | Nasdaq-100 Fund vs. Goldman Sachs Large | Nasdaq-100 Fund vs. William Blair Large |
| Muhlenkamp Fund vs. Third Avenue Value | Muhlenkamp Fund vs. Meridian Growth Fund | Muhlenkamp Fund vs. Heartland Value Fund | Muhlenkamp Fund vs. Mairs Power Growth |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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