Correlation Between MidCap Financial and Corsair Gaming
Can any of the company-specific risk be diversified away by investing in both MidCap Financial and Corsair Gaming 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 MidCap Financial and Corsair Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MidCap Financial Investment and Corsair Gaming, you can compare the effects of market volatilities on MidCap Financial and Corsair Gaming 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 MidCap Financial with a short position of Corsair Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and Corsair Gaming.
Diversification Opportunities for MidCap Financial and Corsair Gaming
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MidCap and Corsair is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair Gaming and MidCap Financial 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 MidCap Financial Investment are associated (or correlated) with Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of MidCap Financial i.e., MidCap Financial and Corsair Gaming go up and down completely randomly.
Pair Corralation between MidCap Financial and Corsair Gaming
Assuming the 90 days trading horizon MidCap Financial is expected to generate 3.48 times less return on investment than Corsair Gaming. But when comparing it to its historical volatility, MidCap Financial Investment is 4.68 times less risky than Corsair Gaming. It trades about 0.18 of its potential returns per unit of risk. Corsair Gaming is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 649.00 in Corsair Gaming on November 6, 2024 and sell it today you would earn a total of 243.00 from holding Corsair Gaming or generate 37.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MidCap Financial Investment vs. Corsair Gaming
Performance |
| Timeline |
| MidCap Financial Inv |
| Corsair Gaming |
MidCap Financial and Corsair Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidCap Financial and Corsair Gaming
The main advantage of trading using opposite MidCap Financial and Corsair Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial position performs unexpectedly, Corsair Gaming 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 Corsair Gaming will offset losses from the drop in Corsair Gaming's long position.| MidCap Financial vs. Major Drilling Group | MidCap Financial vs. BORR DRILLING NEW | MidCap Financial vs. Luckin Coffee | MidCap Financial vs. VARIOUS EATERIES LS |
| Corsair Gaming vs. Molson Coors Beverage | Corsair Gaming vs. US FOODS HOLDING | Corsair Gaming vs. BRIT AMER TOBACCO | Corsair Gaming vs. United Natural Foods |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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