The Arbitrage Correlations

Mutual Funds . USA . 
Fund . The Arbitrage Fund
ARBFX Fund  USD 13.19  0.01  0.08%   
The current 90-days correlation between The Arbitrage and The Merger Fund is 0.7 (i.e., Poor diversification). The correlation of The Arbitrage is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.

The Arbitrage Correlation With Market

Good diversification

The correlation between The Arbitrage Fund and DJI is -0.08 (i.e., Good diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding The Arbitrage Fund and DJI in the same portfolio, assuming nothing else is changed.
  
Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in The Arbitrage Fund. Also, note that the market value of any mutual fund could be closely tied with the direction of predictive economic indicators such as signals in census.

Moving together with The Mutual Fund

  0.89BCLPX Blckrk Lc CrPairCorr
  0.91BALPX Blckrk Lc CrPairCorr
  0.91BILPX Blkrk Lc CrPairCorr
  0.97MERIX Merger FundPairCorr
  0.96MERFX Merger FundPairCorr
  0.9VARAX Vivaldi Merger ArbitragePairCorr
  0.91VARBX Vivaldi Merger ArbitragePairCorr
  0.9VARCX First Trust MergerPairCorr
  1.0ARBCX The ArbitragePairCorr
  1.0ARBNX The ArbitragePairCorr
  0.68EMO Clearbridge Energy MlpPairCorr
  0.66SPMPX Invesco Steelpath MlpPairCorr
  0.66SPMJX Invesco Steelpath MlpPairCorr
  0.61LSHEX Kinetics Spin OffPairCorr
  0.62CVX Chevron CorpPairCorr
  0.87GE GE AerospacePairCorr

Moving against The Mutual Fund

  0.68SMPSX Semiconductor UltrasectorPairCorr
  0.66SMPIX Semiconductor UltrasectorPairCorr
  0.42MSFT MicrosoftPairCorr
  0.39AA Alcoa CorpPairCorr
  0.31PFE Pfizer IncPairCorr

Related Correlations Analysis

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.
High positive correlations   
CVSIX
+ 0.88
MERFX
DIAMX
+ 0.72
CVSIX
DIAMX
+ 0.62
MERFX
HSGFX
+ 0.51
CVSIX
HSGFX
+ 0.48
MERFX
DIAMX
+ 0.33
GATEX
  
High negative correlations   
GATEX
- 0.87
HSGFX
GATEX
- 0.1
MERFX
GATEX
- 0.08
CVSIX

Risk-Adjusted Indicators

There is a big difference between The Mutual Fund performing well and The Arbitrage Mutual Fund doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze The Arbitrage's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

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