Correlation Between Visa and Muhlenkamp Fund
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Muhlenkamp Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Muhlenkamp Fund Institutional, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Muhlenkamp Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Muhlenkamp Fund.
Diversification Opportunities for Visa and Muhlenkamp Fund
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Muhlenkamp is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and Muhlenkamp Fund go up and down completely randomly.
Pair Corralation between Visa and Muhlenkamp Fund
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.17 times more return on investment than Muhlenkamp Fund. However, Visa is 1.17 times more volatile than Muhlenkamp Fund Institutional. It trades about 0.44 of its potential returns per unit of risk. Muhlenkamp Fund Institutional is currently generating about 0.26 per unit of risk. If you would invest 31,440 in Visa Class A on November 3, 2024 and sell it today you would earn a total of 2,740 from holding Visa Class A or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Muhlenkamp Fund Institutional
Performance |
| Timeline |
| Visa Class A |
| Muhlenkamp Fund Inst |
Visa and Muhlenkamp Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Muhlenkamp Fund
The main advantage of trading using opposite Visa and Muhlenkamp Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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