Correlation Between Al Frank and Monteagle Select

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

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

Diversification Opportunities for Al Frank and Monteagle Select

0.94

Correlation Coefficient

Al Frank  Monteagle Select

Almost no diversification

The 3 months correlation between VALAX and Monteagle is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Al Frank Fund 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 Al Frank 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 Al Frank Fund 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 Al Frank i.e., Al Frank and Monteagle Select go up and down completely randomly.

Pair Corralation between Al Frank and Monteagle Select

Assuming the 90 days horizon Al Frank Fund is expected to generate 0.82 times more return on investment than Monteagle Select. However, Al Frank Fund is 1.23 times less risky than Monteagle Select. It trades about 0.3 of its potential returns per unit of risk. Monteagle Select Value is currently generating about 0.17 per unit of risk. If you would invest  2,398  in Al Frank Fund on April 30, 2025 and sell it today you would earn a total of  387.00  from holding Al Frank Fund or generate 16.14% return on investment over 90 days.

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

Al Frank Fund  vs.  Monteagle Select Value

Al Frank Fund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Al Frank Fund are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Al Frank showed solid returns over the last few months and may actually be approaching a breakup point.

Monteagle Select Value

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Monteagle Select Value are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Monteagle Select may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Al Frank and Monteagle Select

The main advantage of trading using opposite Al Frank and Monteagle Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Frank 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 Al Frank Fund 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.