Correlation Between MidCap Financial and WisdomTree
Can any of the company-specific risk be diversified away by investing in both MidCap Financial and WisdomTree 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 WisdomTree 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 WisdomTree, you can compare the effects of market volatilities on MidCap Financial and WisdomTree 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 WisdomTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and WisdomTree.
Diversification Opportunities for MidCap Financial and WisdomTree
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MidCap and WisdomTree is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and WisdomTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree 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 WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree has no effect on the direction of MidCap Financial i.e., MidCap Financial and WisdomTree go up and down completely randomly.
Pair Corralation between MidCap Financial and WisdomTree
Given the investment horizon of 90 days MidCap Financial Investment is expected to under-perform the WisdomTree. But the stock apears to be less risky and, when comparing its historical volatility, MidCap Financial Investment is 1.62 times less risky than WisdomTree. The stock trades about -0.13 of its potential returns per unit of risk. The WisdomTree is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 1,099 in WisdomTree on September 30, 2025 and sell it today you would earn a total of 141.00 from holding WisdomTree or generate 12.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MidCap Financial Investment vs. WisdomTree
Performance |
| Timeline |
| MidCap Financial Inv |
| WisdomTree |
MidCap Financial and WisdomTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidCap Financial and WisdomTree
The main advantage of trading using opposite MidCap Financial and WisdomTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial position performs unexpectedly, WisdomTree 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 WisdomTree will offset losses from the drop in WisdomTree's long position.| MidCap Financial vs. BlackRock | MidCap Financial vs. Main Street Capital | MidCap Financial vs. Blackstone Group | MidCap Financial vs. Ares Capital |
| WisdomTree vs. Acadian Asset Management | WisdomTree vs. Tri Continental Closed | WisdomTree vs. Grab Holdings | WisdomTree vs. Oxford Lane Capital |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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