Correlation Between Matson Money and Viking Tax-free

Can any of the company-specific risk be diversified away by investing in both Matson Money and Viking Tax-free 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 Matson Money and Viking Tax-free into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Matson Money Equity and Viking Tax Free Fund, you can compare the effects of market volatilities on Matson Money and Viking Tax-free 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 Matson Money with a short position of Viking Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Viking Tax-free.

Diversification Opportunities for Matson Money and Viking Tax-free

0.18

Correlation Coefficient

Matson Money  Viking Tax-free

Average diversification

The 3 months correlation between Matson and Viking is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and Viking Tax Free Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Tax Free and Matson Money 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 Matson Money Equity are associated (or correlated) with Viking Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Tax Free has no effect on the direction of Matson Money i.e., Matson Money and Viking Tax-free go up and down completely randomly.

Pair Corralation between Matson Money and Viking Tax-free

Assuming the 90 days horizon Matson Money Equity is expected to under-perform the Viking Tax-free. In addition to that, Matson Money is 3.26 times more volatile than Viking Tax Free Fund. It trades about -0.05 of its total potential returns per unit of risk. Viking Tax Free Fund is currently generating about -0.09 per unit of volatility. If you would invest  876.00  in Viking Tax Free Fund on December 28, 2024 and sell it today you would lose (14.00) from holding Viking Tax Free Fund or give up 1.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Matson Money Equity  vs.  Viking Tax Free Fund

Matson Money Equity

Risk-Adjusted Performance

Very Weak

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

Viking Tax Free

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Matson Money and Viking Tax-free

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

The idea behind Matson Money Equity and Viking Tax Free Fund 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.