Correlation Between Cardinal Small and Tax-exempt Fund

Can any of the company-specific risk be diversified away by investing in both Cardinal Small and Tax-exempt 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 Cardinal Small and Tax-exempt Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cardinal Small Cap and Tax Exempt Fund Of, you can compare the effects of market volatilities on Cardinal Small and Tax-exempt 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 Cardinal Small with a short position of Tax-exempt Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Small and Tax-exempt Fund.

Diversification Opportunities for Cardinal Small and Tax-exempt Fund

0.0

Correlation Coefficient

Cardinal Small  Tax-exempt Fund

Pay attention - limited upside

The 3 months correlation between Cardinal and Tax-exempt is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Small Cap and Tax Exempt Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tax Exempt Fund and Cardinal Small 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 Cardinal Small Cap are associated (or correlated) with Tax-exempt Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tax Exempt Fund has no effect on the direction of Cardinal Small i.e., Cardinal Small and Tax-exempt Fund go up and down completely randomly.

Pair Corralation between Cardinal Small and Tax-exempt Fund

Assuming the 90 days horizon Cardinal Small Cap is expected to generate 4.11 times more return on investment than Tax-exempt Fund. However, Cardinal Small is 4.11 times more volatile than Tax Exempt Fund Of. It trades about 0.04 of its potential returns per unit of risk. Tax Exempt Fund Of is currently generating about 0.06 per unit of risk. If you would invest  1,360  in Cardinal Small Cap on October 9, 2024 and sell it today you would earn a total of  84.00  from holding Cardinal Small Cap or generate 6.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.46%
Values	Daily Returns

Cardinal Small Cap  vs.  Tax Exempt Fund Of

Cardinal Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cardinal Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Cardinal Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tax Exempt Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tax Exempt Fund Of has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Tax-exempt Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cardinal Small and Tax-exempt Fund

The main advantage of trading using opposite Cardinal Small and Tax-exempt Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Small position performs unexpectedly, Tax-exempt 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 Tax-exempt Fund will offset losses from the drop in Tax-exempt Fund's long position.

The idea behind Cardinal Small Cap and Tax Exempt Fund Of pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.