Correlation Between MidCap Financial and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both MidCap Financial and Thyssenkrupp 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 Thyssenkrupp 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 thyssenkrupp AG, you can compare the effects of market volatilities on MidCap Financial and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and Thyssenkrupp.
Diversification Opportunities for MidCap Financial and Thyssenkrupp
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MidCap and Thyssenkrupp is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of MidCap Financial i.e., MidCap Financial and Thyssenkrupp go up and down completely randomly.
Pair Corralation between MidCap Financial and Thyssenkrupp
Assuming the 90 days trading horizon MidCap Financial Investment is expected to generate 0.65 times more return on investment than Thyssenkrupp. However, MidCap Financial Investment is 1.54 times less risky than Thyssenkrupp. It trades about 0.05 of its potential returns per unit of risk. thyssenkrupp AG is currently generating about -0.29 per unit of risk. If you would invest 1,285 in MidCap Financial Investment on October 16, 2024 and sell it today you would earn a total of 10.00 from holding MidCap Financial Investment or generate 0.78% 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. thyssenkrupp AG
Performance |
| Timeline |
| MidCap Financial Inv |
| thyssenkrupp AG |
MidCap Financial and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidCap Financial and Thyssenkrupp
The main advantage of trading using opposite MidCap Financial and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| MidCap Financial vs. Apple Inc | MidCap Financial vs. Apple Inc | MidCap Financial vs. Apple Inc | MidCap Financial vs. Apple Inc |
| Thyssenkrupp vs. INTERSHOP Communications Aktiengesellschaft | Thyssenkrupp vs. Algonquin Power Utilities | Thyssenkrupp vs. Computershare Limited | Thyssenkrupp vs. Cal Maine 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| CEOs Directory Screen CEOs from public companies around the world |