Correlation Between MidCap Financial and MARKET VECTR
Can any of the company-specific risk be diversified away by investing in both MidCap Financial and MARKET VECTR 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 MARKET VECTR 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 MARKET VECTR RETAIL, you can compare the effects of market volatilities on MidCap Financial and MARKET VECTR 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 MARKET VECTR. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and MARKET VECTR.
Diversification Opportunities for MidCap Financial and MARKET VECTR
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MidCap and MARKET is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and MARKET VECTR RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARKET VECTR RETAIL 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 MARKET VECTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARKET VECTR RETAIL has no effect on the direction of MidCap Financial i.e., MidCap Financial and MARKET VECTR go up and down completely randomly.
Pair Corralation between MidCap Financial and MARKET VECTR
Assuming the 90 days trading horizon MidCap Financial is expected to generate 1.28 times less return on investment than MARKET VECTR. In addition to that, MidCap Financial is 1.63 times more volatile than MARKET VECTR RETAIL. It trades about 0.05 of its total potential returns per unit of risk. MARKET VECTR RETAIL is currently generating about 0.11 per unit of volatility. If you would invest 18,332 in MARKET VECTR RETAIL on October 29, 2024 and sell it today you would earn a total of 4,453 from holding MARKET VECTR RETAIL or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
MidCap Financial Investment vs. MARKET VECTR RETAIL
Performance |
| Timeline |
| MidCap Financial Inv |
| MARKET VECTR RETAIL |
MidCap Financial and MARKET VECTR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidCap Financial and MARKET VECTR
The main advantage of trading using opposite MidCap Financial and MARKET VECTR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial position performs unexpectedly, MARKET VECTR 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 MARKET VECTR will offset losses from the drop in MARKET VECTR's long position.| MidCap Financial vs. Tianjin Capital Environmental | MidCap Financial vs. SLR Investment Corp | MidCap Financial vs. Chuangs China Investments | MidCap Financial vs. CHAMPION IRON |
| MARKET VECTR vs. Eurasia Mining Plc | MARKET VECTR vs. Monument Mining Limited | MARKET VECTR vs. MINCO SILVER | MARKET VECTR vs. STGEORGE MINING LTD |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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