Correlation Between Cargile Fund and Msift High

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

By analyzing existing cross correlation between Cargile Fund and Msift High Yield, you can compare the effects of market volatilities on Cargile Fund and Msift High 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 Cargile Fund with a short position of Msift High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cargile Fund and Msift High.

Diversification Opportunities for Cargile Fund and Msift High

0.38

Correlation Coefficient

Cargile Fund  Msift High

Weak diversification

The 3 months correlation between Cargile and Msift is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cargile Fund and Msift High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msift High Yield and Cargile 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 Cargile Fund are associated (or correlated) with Msift High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msift High Yield has no effect on the direction of Cargile Fund i.e., Cargile Fund and Msift High go up and down completely randomly.

Pair Corralation between Cargile Fund and Msift High

Assuming the 90 days horizon Cargile Fund is expected to under-perform the Msift High. In addition to that, Cargile Fund is 3.42 times more volatile than Msift High Yield. It trades about -0.1 of its total potential returns per unit of risk. Msift High Yield is currently generating about 0.1 per unit of volatility. If you would invest  840.00  in Msift High Yield on December 20, 2024 and sell it today you would earn a total of  8.00  from holding Msift High Yield or generate 0.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Cargile Fund  vs.  Msift High Yield

Cargile Fund

Risk-Adjusted Performance

Very Weak

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

Msift High Yield

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Msift High Yield are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Msift High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cargile Fund and Msift High

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

The idea behind Cargile Fund and Msift High Yield 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.