Correlation Between Mid Cap and Summit Global
Can any of the company-specific risk be diversified away by investing in both Mid Cap and Summit Global 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 Mid Cap and Summit Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap 15x Strategy and Summit Global Investments, you can compare the effects of market volatilities on Mid Cap and Summit Global 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 Mid Cap with a short position of Summit Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Summit Global.
Diversification Opportunities for Mid Cap and Summit Global
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mid and Summit is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and Summit Global Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Global Investments and Mid Cap 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 Mid Cap 15x Strategy are associated (or correlated) with Summit Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Global Investments has no effect on the direction of Mid Cap i.e., Mid Cap and Summit Global go up and down completely randomly.
Pair Corralation between Mid Cap and Summit Global
Assuming the 90 days horizon Mid Cap 15x Strategy is expected to under-perform the Summit Global. In addition to that, Mid Cap is 2.78 times more volatile than Summit Global Investments. It trades about -0.06 of its total potential returns per unit of risk. Summit Global Investments is currently generating about -0.04 per unit of volatility. If you would invest 4,012 in Summit Global Investments on September 12, 2024 and sell it today you would lose (14.00) from holding Summit Global Investments or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Cap 15x Strategy vs. Summit Global Investments
Performance |
| Timeline |
| Mid Cap 15x |
| Summit Global Investments |
Mid Cap and Summit Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Cap and Summit Global
The main advantage of trading using opposite Mid Cap and Summit Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap position performs unexpectedly, Summit Global 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 Summit Global will offset losses from the drop in Summit Global's long position.| Mid Cap vs. Western Asset Municipal | Mid Cap vs. Alliancebernstein National Municipal | Mid Cap vs. Multisector Bond Sma | Mid Cap vs. Ab Bond Inflation |
| Summit Global vs. Investec Emerging Markets | Summit Global vs. Mid Cap 15x Strategy | Summit Global vs. Ep Emerging Markets | Summit Global vs. Barings Emerging Markets |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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