Correlation Between Madison Mid and Kirr Marbach
Can any of the company-specific risk be diversified away by investing in both Madison Mid and Kirr Marbach 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 Madison Mid and Kirr Marbach into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Madison Mid Cap and Kirr Marbach Partners, you can compare the effects of market volatilities on Madison Mid and Kirr Marbach 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 Madison Mid with a short position of Kirr Marbach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madison Mid and Kirr Marbach.
Diversification Opportunities for Madison Mid and Kirr Marbach
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Madison and Kirr is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Madison Mid Cap and Kirr Marbach Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kirr Marbach Partners and Madison Mid 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 Madison Mid Cap are associated (or correlated) with Kirr Marbach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kirr Marbach Partners has no effect on the direction of Madison Mid i.e., Madison Mid and Kirr Marbach go up and down completely randomly.
Pair Corralation between Madison Mid and Kirr Marbach
Assuming the 90 days horizon Madison Mid Cap is expected to under-perform the Kirr Marbach. But the mutual fund apears to be less risky and, when comparing its historical volatility, Madison Mid Cap is 1.32 times less risky than Kirr Marbach. The mutual fund trades about -0.31 of its potential returns per unit of risk. The Kirr Marbach Partners is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 3,531 in Kirr Marbach Partners on October 10, 2024 and sell it today you would lose (232.00) from holding Kirr Marbach Partners or give up 6.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Madison Mid Cap vs. Kirr Marbach Partners
Performance |
| Timeline |
| Madison Mid Cap |
| Kirr Marbach Partners |
Madison Mid and Kirr Marbach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Madison Mid and Kirr Marbach
The main advantage of trading using opposite Madison Mid and Kirr Marbach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Madison Mid position performs unexpectedly, Kirr Marbach 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 Kirr Marbach will offset losses from the drop in Kirr Marbach's long position.| Madison Mid vs. Pro Blend Extended Term | Madison Mid vs. Fam Value Fund | Madison Mid vs. Common Stock Fund | Madison Mid vs. Meridian Trarian Fund |
| Kirr Marbach vs. Touchstone Sands Capital | Kirr Marbach vs. Madison Mid Cap | Kirr Marbach vs. Harbor Mid Cap | Kirr Marbach vs. James Small Cap |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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