Correlation Between MidCap Financial and Corning Incorporated
Can any of the company-specific risk be diversified away by investing in both MidCap Financial and Corning Incorporated 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 Corning Incorporated 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 Corning Incorporated, you can compare the effects of market volatilities on MidCap Financial and Corning Incorporated 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 Corning Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and Corning Incorporated.
Diversification Opportunities for MidCap Financial and Corning Incorporated
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MidCap and Corning is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and Corning Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corning Incorporated 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 Corning Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corning Incorporated has no effect on the direction of MidCap Financial i.e., MidCap Financial and Corning Incorporated go up and down completely randomly.
Pair Corralation between MidCap Financial and Corning Incorporated
Assuming the 90 days trading horizon MidCap Financial is expected to generate 1.02 times less return on investment than Corning Incorporated. But when comparing it to its historical volatility, MidCap Financial Investment is 1.28 times less risky than Corning Incorporated. It trades about 0.07 of its potential returns per unit of risk. Corning Incorporated is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,111 in Corning Incorporated on October 9, 2024 and sell it today you would earn a total of 1,489 from holding Corning Incorporated or generate 47.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MidCap Financial Investment vs. Corning Incorporated
Performance |
| Timeline |
| MidCap Financial Inv |
| Corning Incorporated |
MidCap Financial and Corning Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidCap Financial and Corning Incorporated
The main advantage of trading using opposite MidCap Financial and Corning Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial position performs unexpectedly, Corning Incorporated 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 Corning Incorporated will offset losses from the drop in Corning Incorporated's long position.| MidCap Financial vs. CEOTRONICS | MidCap Financial vs. UNITED UTILITIES GR | MidCap Financial vs. Astral Foods Limited | MidCap Financial vs. Corporate Travel Management |
| Corning Incorporated vs. Materialise NV | Corning Incorporated vs. The Home Depot | Corning Incorporated vs. Vulcan Materials | Corning Incorporated vs. Beazer Homes USA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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