Correlation Between Maine Municipal and Alternative Asset

Can any of the company-specific risk be diversified away by investing in both Maine Municipal and Alternative Asset 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 Maine Municipal and Alternative Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Maine Municipal Fund and Alternative Asset Allocation, you can compare the effects of market volatilities on Maine Municipal and Alternative Asset 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 Maine Municipal with a short position of Alternative Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maine Municipal and Alternative Asset.

Diversification Opportunities for Maine Municipal and Alternative Asset

0.54

Correlation Coefficient

Maine Municipal  Alternative Asset

Very weak diversification

The 3 months correlation between Maine and Alternative is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Maine Municipal Fund and Alternative Asset Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Asset and Maine Municipal 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 Maine Municipal Fund are associated (or correlated) with Alternative Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Asset has no effect on the direction of Maine Municipal i.e., Maine Municipal and Alternative Asset go up and down completely randomly.

Pair Corralation between Maine Municipal and Alternative Asset

Assuming the 90 days horizon Maine Municipal Fund is expected to generate 0.48 times more return on investment than Alternative Asset. However, Maine Municipal Fund is 2.07 times less risky than Alternative Asset. It trades about -0.37 of its potential returns per unit of risk. Alternative Asset Allocation is currently generating about -0.21 per unit of risk. If you would invest  962.00  in Maine Municipal Fund on October 9, 2024 and sell it today you would lose (16.00) from holding Maine Municipal Fund or give up 1.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Maine Municipal Fund  vs.  Alternative Asset Allocation

Maine Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Alternative Asset

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Maine Municipal and Alternative Asset

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

The idea behind Maine Municipal Fund and Alternative Asset Allocation 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 CEOs Directory module to screen CEOs from public companies around the world.