Correlation Between Corporate Travel and MidCap Financial
Can any of the company-specific risk be diversified away by investing in both Corporate Travel and MidCap Financial 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 Corporate Travel and MidCap Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Travel Management and MidCap Financial Investment, you can compare the effects of market volatilities on Corporate Travel and MidCap Financial 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 Corporate Travel with a short position of MidCap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and MidCap Financial.
Diversification Opportunities for Corporate Travel and MidCap Financial
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Corporate and MidCap is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management and MidCap Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MidCap Financial Inv and Corporate Travel 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 Corporate Travel Management are associated (or correlated) with MidCap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MidCap Financial Inv has no effect on the direction of Corporate Travel i.e., Corporate Travel and MidCap Financial go up and down completely randomly.
Pair Corralation between Corporate Travel and MidCap Financial
Assuming the 90 days trading horizon Corporate Travel Management is expected to generate 1.95 times more return on investment than MidCap Financial. However, Corporate Travel is 1.95 times more volatile than MidCap Financial Investment. It trades about 0.35 of its potential returns per unit of risk. MidCap Financial Investment is currently generating about 0.05 per unit of risk. If you would invest 770.00 in Corporate Travel Management on October 25, 2024 and sell it today you would earn a total of 100.00 from holding Corporate Travel Management or generate 12.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Travel Management vs. MidCap Financial Investment
Performance |
| Timeline |
| Corporate Travel Man |
| MidCap Financial Inv |
Corporate Travel and MidCap Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Travel and MidCap Financial
The main advantage of trading using opposite Corporate Travel and MidCap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel position performs unexpectedly, MidCap Financial 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 MidCap Financial will offset losses from the drop in MidCap Financial's long position.| Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc |
| MidCap Financial vs. ANTA SPORTS PRODUCT | MidCap Financial vs. COLUMBIA SPORTSWEAR | MidCap Financial vs. ON SEMICONDUCTOR | MidCap Financial vs. PLAY2CHILL SA ZY |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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