Correlation Between Munivest Fund and RiverNorth Flexible

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

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

Diversification Opportunities for Munivest Fund and RiverNorth Flexible

0.8

Correlation Coefficient

Munivest Fund  RiverNorth Flexible

Very poor diversification

The 3 months correlation between Munivest and RiverNorth is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Munivest Fund and RiverNorth Flexible Municipalo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorth Flexible and Munivest 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 Munivest Fund are associated (or correlated) with RiverNorth Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorth Flexible has no effect on the direction of Munivest Fund i.e., Munivest Fund and RiverNorth Flexible go up and down completely randomly.

Pair Corralation between Munivest Fund and RiverNorth Flexible

Considering the 90-day investment horizon Munivest Fund is expected to under-perform the RiverNorth Flexible. In addition to that, Munivest Fund is 1.05 times more volatile than RiverNorth Flexible Municipalome. It trades about -0.03 of its total potential returns per unit of risk. RiverNorth Flexible Municipalome is currently generating about 0.05 per unit of volatility. If you would invest  1,395  in RiverNorth Flexible Municipalome on November 29, 2024 and sell it today you would earn a total of  27.00  from holding RiverNorth Flexible Municipalome or generate 1.94% return on investment over 90 days.

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

Munivest Fund  vs.  RiverNorth Flexible Municipalo

Munivest Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Munivest Fund has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Munivest Fund is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

RiverNorth Flexible

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RiverNorth Flexible Municipalome are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, RiverNorth Flexible is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Munivest Fund and RiverNorth Flexible

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

The idea behind Munivest Fund and RiverNorth Flexible Municipalome 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.