Correlation Between Spectrum Fund and Muirfield Fund
Can any of the company-specific risk be diversified away by investing in both Spectrum Fund and Muirfield 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 Spectrum Fund and Muirfield Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spectrum Fund Adviser and Muirfield Fund Retail, you can compare the effects of market volatilities on Spectrum Fund and Muirfield 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 Spectrum Fund with a short position of Muirfield Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectrum Fund and Muirfield Fund.
Diversification Opportunities for Spectrum Fund and Muirfield Fund
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Spectrum and MUIRFIELD is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Spectrum Fund Adviser and Muirfield Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muirfield Fund Retail and Spectrum 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 Spectrum Fund Adviser are associated (or correlated) with Muirfield Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muirfield Fund Retail has no effect on the direction of Spectrum Fund i.e., Spectrum Fund and Muirfield Fund go up and down completely randomly.
Pair Corralation between Spectrum Fund and Muirfield Fund
Assuming the 90 days horizon Spectrum Fund Adviser is expected to generate 1.02 times more return on investment than Muirfield Fund. However, Spectrum Fund is 1.02 times more volatile than Muirfield Fund Retail. It trades about 0.29 of its potential returns per unit of risk. Muirfield Fund Retail is currently generating about 0.27 per unit of risk. If you would invest 1,466 in Spectrum Fund Adviser on September 5, 2024 and sell it today you would earn a total of 73.00 from holding Spectrum Fund Adviser or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spectrum Fund Adviser vs. Muirfield Fund Retail
Performance |
| Timeline |
| Spectrum Fund Adviser |
| Muirfield Fund Retail |
Spectrum Fund and Muirfield Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spectrum Fund and Muirfield Fund
The main advantage of trading using opposite Spectrum Fund and Muirfield Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spectrum Fund position performs unexpectedly, Muirfield 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 Muirfield Fund will offset losses from the drop in Muirfield Fund's long position.| Spectrum Fund vs. Muirfield Fund Retail | Spectrum Fund vs. Dynamic Growth Fund | Spectrum Fund vs. Balanced Fund Retail | Spectrum Fund vs. Quantex Fund Retail |
| Muirfield Fund vs. Quantex Fund Retail | Muirfield Fund vs. Infrastructure Fund Retail | Muirfield Fund vs. Dynamic Growth Fund | Muirfield Fund vs. Balanced Fund Retail |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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