Correlation Between Viking Tax-free and Maine Municipal
Can any of the company-specific risk be diversified away by investing in both Viking Tax-free and Maine Municipal 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 Viking Tax-free and Maine Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viking Tax Free Fund and Maine Municipal Fund, you can compare the effects of market volatilities on Viking Tax-free and Maine Municipal 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 Viking Tax-free with a short position of Maine Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viking Tax-free and Maine Municipal.
Diversification Opportunities for Viking Tax-free and Maine Municipal
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Viking and Maine is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Viking Tax Free Fund and Maine Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maine Municipal and Viking Tax-free 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 Viking Tax Free Fund are associated (or correlated) with Maine Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maine Municipal has no effect on the direction of Viking Tax-free i.e., Viking Tax-free and Maine Municipal go up and down completely randomly.
Pair Corralation between Viking Tax-free and Maine Municipal
Assuming the 90 days horizon Viking Tax Free Fund is expected to generate 0.85 times more return on investment than Maine Municipal. However, Viking Tax Free Fund is 1.18 times less risky than Maine Municipal. It trades about 0.0 of its potential returns per unit of risk. Maine Municipal Fund is currently generating about -0.07 per unit of risk. If you would invest 907.00 in Viking Tax Free Fund on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Viking Tax Free Fund or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viking Tax Free Fund vs. Maine Municipal Fund
Performance |
| Timeline |
| Viking Tax Free |
| Maine Municipal |
Viking Tax-free and Maine Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viking Tax-free and Maine Municipal
The main advantage of trading using opposite Viking Tax-free and Maine Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viking Tax-free position performs unexpectedly, Maine Municipal 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 Maine Municipal will offset losses from the drop in Maine Municipal's long position.| Viking Tax-free vs. Versatile Bond Portfolio | Viking Tax-free vs. Ultra Short Fixed Income | Viking Tax-free vs. Rationalpier 88 Convertible | Viking Tax-free vs. Mirova Global Green |
| Maine Municipal vs. Transamerica Large Cap | Maine Municipal vs. Ab Large Cap | Maine Municipal vs. Avantis Large Cap |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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