Correlation Between Adams Natural and Munivest Fund
Can any of the company-specific risk be diversified away by investing in both Adams Natural and Munivest 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 Adams Natural and Munivest Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Natural Resources and Munivest Fund, you can compare the effects of market volatilities on Adams Natural and Munivest 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 Adams Natural with a short position of Munivest Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Natural and Munivest Fund.
Diversification Opportunities for Adams Natural and Munivest Fund
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Adams and Munivest is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources and Munivest Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Munivest Fund and Adams Natural 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 Adams Natural Resources are associated (or correlated) with Munivest Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Munivest Fund has no effect on the direction of Adams Natural i.e., Adams Natural and Munivest Fund go up and down completely randomly.
Pair Corralation between Adams Natural and Munivest Fund
Considering the 90-day investment horizon Adams Natural Resources is expected to generate 1.33 times more return on investment than Munivest Fund. However, Adams Natural is 1.33 times more volatile than Munivest Fund. It trades about 0.2 of its potential returns per unit of risk. Munivest Fund is currently generating about 0.09 per unit of risk. If you would invest 2,071 in Adams Natural Resources on June 10, 2025 and sell it today you would earn a total of 64.00 from holding Adams Natural Resources or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adams Natural Resources vs. Munivest Fund
Performance |
| Timeline |
| Adams Natural Resources |
| Munivest Fund |
Adams Natural and Munivest Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Natural and Munivest Fund
The main advantage of trading using opposite Adams Natural and Munivest Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural position performs unexpectedly, Munivest 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 Munivest Fund will offset losses from the drop in Munivest Fund's long position.| Adams Natural vs. Adams Diversified Equity | Adams Natural vs. Central Securities | Adams Natural vs. General American Investors | Adams Natural vs. Putnam Municipal Opportunities |
| Munivest Fund vs. Blackrock Muniyield | Munivest Fund vs. Blackrock Muniyield Quality | Munivest Fund vs. Blackrock Muniyield Quality | Munivest Fund vs. Blackrock Muniholdings Quality |
Check out your portfolio center.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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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