Correlation Between MINT Income and Blue Ribbon

Can any of the company-specific risk be diversified away by investing in both MINT Income and Blue Ribbon 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 MINT Income and Blue Ribbon into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for MINT Income and Blue Ribbon

0.83

Correlation Coefficient

MINT Income  Blue Ribbon

Very poor diversification

The 3 months correlation between MINT and Blue is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding MINT Income Fund and Blue Ribbon Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Ribbon Income and MINT Income 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 MINT Income Fund are associated (or correlated) with Blue Ribbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Ribbon Income has no effect on the direction of MINT Income i.e., MINT Income and Blue Ribbon go up and down completely randomly.

Pair Corralation between MINT Income and Blue Ribbon

Assuming the 90 days trading horizon MINT Income Fund is expected to generate 0.72 times more return on investment than Blue Ribbon. However, MINT Income Fund is 1.39 times less risky than Blue Ribbon. It trades about -0.06 of its potential returns per unit of risk. Blue Ribbon Income is currently generating about -0.12 per unit of risk. If you would invest  781.00  in MINT Income Fund on December 30, 2024 and sell it today you would lose (33.00) from holding MINT Income Fund or give up 4.23% of portfolio value over 90 days.

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

MINT Income Fund  vs.  Blue Ribbon Income

MINT Income Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days MINT Income Fund has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, MINT Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blue Ribbon Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blue Ribbon Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with MINT Income and Blue Ribbon

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

The idea behind MINT Income Fund and Blue Ribbon Income 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.