Correlation Between Quantex Fund and Muirfield Fund

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

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

Diversification Opportunities for Quantex Fund and Muirfield Fund

0.97

Correlation Coefficient

Quantex Fund  Muirfield Fund

Almost no diversification

The 3 months correlation between Quantex and Muirfield is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Quantex Fund Adviser and Muirfield Fund Adviser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muirfield Fund Adviser and Quantex 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 Quantex Fund Adviser are associated (or correlated) with Muirfield Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muirfield Fund Adviser has no effect on the direction of Quantex Fund i.e., Quantex Fund and Muirfield Fund go up and down completely randomly.

Pair Corralation between Quantex Fund and Muirfield Fund

Assuming the 90 days horizon Quantex Fund Adviser is expected to under-perform the Muirfield Fund. In addition to that, Quantex Fund is 1.05 times more volatile than Muirfield Fund Adviser. It trades about -0.05 of its total potential returns per unit of risk. Muirfield Fund Adviser is currently generating about -0.03 per unit of volatility. If you would invest  931.00  in Muirfield Fund Adviser on December 31, 2024 and sell it today you would lose (20.00) from holding Muirfield Fund Adviser or give up 2.15% of portfolio value over 90 days.

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

Quantex Fund Adviser  vs.  Muirfield Fund Adviser

Quantex Fund Adviser

Risk-Adjusted Performance

Very Weak

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

Muirfield Fund Adviser

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Quantex Fund and Muirfield Fund

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

The idea behind Quantex Fund Adviser and Muirfield Fund Adviser 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.