Correlation Between Smallcap Fund and Monteagle Select

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

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

Diversification Opportunities for Smallcap Fund and Monteagle Select

0.91

Correlation Coefficient

Smallcap Fund  Monteagle Select

Almost no diversification

The 3 months correlation between Smallcap and Monteagle is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Fund Fka and Monteagle Select Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monteagle Select Value and Smallcap 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 Smallcap Fund Fka are associated (or correlated) with Monteagle Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monteagle Select Value has no effect on the direction of Smallcap Fund i.e., Smallcap Fund and Monteagle Select go up and down completely randomly.

Pair Corralation between Smallcap Fund and Monteagle Select

Assuming the 90 days horizon Smallcap Fund Fka is expected to generate 1.06 times more return on investment than Monteagle Select. However, Smallcap Fund is 1.06 times more volatile than Monteagle Select Value. It trades about 0.23 of its potential returns per unit of risk. Monteagle Select Value is currently generating about 0.12 per unit of risk. If you would invest  2,398  in Smallcap Fund Fka on May 21, 2025 and sell it today you would earn a total of  313.00  from holding Smallcap Fund Fka or generate 13.05% return on investment over 90 days.

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

Smallcap Fund Fka  vs.  Monteagle Select Value

Smallcap Fund Fka

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap Fund Fka are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Smallcap Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Monteagle Select Value

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Monteagle Select Value are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unfluctuating forward indicators, Monteagle Select may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Smallcap Fund and Monteagle Select

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

The idea behind Smallcap Fund Fka and Monteagle Select Value 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.