Correlation Between Alphabet and Midwest Holding
Can any of the company-specific risk be diversified away by investing in both Alphabet and Midwest Holding 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 Alphabet and Midwest Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and Midwest Holding, you can compare the effects of market volatilities on Alphabet and Midwest Holding 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 Alphabet with a short position of Midwest Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Midwest Holding.
Diversification Opportunities for Alphabet and Midwest Holding
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alphabet and Midwest is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Midwest Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midwest Holding and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Midwest Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midwest Holding has no effect on the direction of Alphabet i.e., Alphabet and Midwest Holding go up and down completely randomly.
Pair Corralation between Alphabet and Midwest Holding
Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 2.25 times more return on investment than Midwest Holding. However, Alphabet is 2.25 times more volatile than Midwest Holding. It trades about 0.06 of its potential returns per unit of risk. Midwest Holding is currently generating about 0.11 per unit of risk. If you would invest 12,237 in Alphabet Inc Class C on August 31, 2024 and sell it today you would earn a total of 4,812 from holding Alphabet Inc Class C or generate 39.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 8.56% |
| Values | Daily Returns |
Alphabet Inc Class C vs. Midwest Holding
Performance |
| Timeline |
| Alphabet Class C |
| Midwest Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alphabet and Midwest Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Midwest Holding
The main advantage of trading using opposite Alphabet and Midwest Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, Midwest Holding 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 Midwest Holding will offset losses from the drop in Midwest Holding's long position.The idea behind Alphabet Inc Class C and Midwest Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. FG Annuities Life | Midwest Holding vs. CNO Financial Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world |