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 |
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
Performance |
Timeline |
Al Frank Fund |
Monteagle Select Value |
Al Frank and Monteagle Select Volatility Contrast
Predicted Return Density |
Returns |
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.Al Frank vs. Alpine Ultra Short | Al Frank vs. Inverse Government Long | Al Frank vs. Franklin Adjustable Government | Al Frank vs. Gurtin California Muni |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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