Correlation Between Perkins Select and Thompson Midcap
Can any of the company-specific risk be diversified away by investing in both Perkins Select and Thompson Midcap 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 Perkins Select and Thompson Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perkins Select Value and Thompson Midcap Fund, you can compare the effects of market volatilities on Perkins Select and Thompson Midcap 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 Perkins Select with a short position of Thompson Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perkins Select and Thompson Midcap.
Diversification Opportunities for Perkins Select and Thompson Midcap
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Perkins and Thompson is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Perkins Select Value and Thompson Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thompson Midcap and Perkins Select 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 Perkins Select Value are associated (or correlated) with Thompson Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thompson Midcap has no effect on the direction of Perkins Select i.e., Perkins Select and Thompson Midcap go up and down completely randomly.
Pair Corralation between Perkins Select and Thompson Midcap
Assuming the 90 days horizon Perkins Select Value is expected to generate 1.35 times more return on investment than Thompson Midcap. However, Perkins Select is 1.35 times more volatile than Thompson Midcap Fund. It trades about 0.2 of its potential returns per unit of risk. Thompson Midcap Fund is currently generating about 0.25 per unit of risk. If you would invest 1,734 in Perkins Select Value on August 30, 2024 and sell it today you would earn a total of 114.00 from holding Perkins Select Value or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perkins Select Value vs. Thompson Midcap Fund
Performance |
| Timeline |
| Perkins Select Value |
| Thompson Midcap |
Perkins Select and Thompson Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perkins Select and Thompson Midcap
The main advantage of trading using opposite Perkins Select and Thompson Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perkins Select position performs unexpectedly, Thompson Midcap 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 Thompson Midcap will offset losses from the drop in Thompson Midcap's long position.| Perkins Select vs. Advent Claymore Convertible | Perkins Select vs. Gabelli Convertible And | Perkins Select vs. Virtus Convertible | Perkins Select vs. Putnam Convertible Incm Gwth |
| Thompson Midcap vs. Thompson Largecap Fund | Thompson Midcap vs. Thompson Bond Fund | Thompson Midcap vs. Crm Smallmid Cap | Thompson Midcap vs. Perkins Select Value |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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