Correlation Between Mid-cap 15x and Nova Fund
Can any of the company-specific risk be diversified away by investing in both Mid-cap 15x and Nova Fund 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 15x and Nova Fund 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 Nova Fund Class, you can compare the effects of market volatilities on Mid-cap 15x and Nova Fund 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 15x with a short position of Nova Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid-cap 15x and Nova Fund.
Diversification Opportunities for Mid-cap 15x and Nova Fund
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mid-cap and Nova is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and Nova Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Fund Class and Mid-cap 15x 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 Nova Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Fund Class has no effect on the direction of Mid-cap 15x i.e., Mid-cap 15x and Nova Fund go up and down completely randomly.
Pair Corralation between Mid-cap 15x and Nova Fund
Assuming the 90 days horizon Mid Cap 15x Strategy is expected to generate 1.41 times more return on investment than Nova Fund. However, Mid-cap 15x is 1.41 times more volatile than Nova Fund Class. It trades about 0.25 of its potential returns per unit of risk. Nova Fund Class is currently generating about 0.14 per unit of risk. If you would invest 10,778 in Mid Cap 15x Strategy on August 27, 2024 and sell it today you would earn a total of 1,026 from holding Mid Cap 15x Strategy or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Cap 15x Strategy vs. Nova Fund Class
Performance |
| Timeline |
| Mid Cap 15x |
| Nova Fund Class |
Mid-cap 15x and Nova Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid-cap 15x and Nova Fund
The main advantage of trading using opposite Mid-cap 15x and Nova Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid-cap 15x position performs unexpectedly, Nova Fund 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 Nova Fund will offset losses from the drop in Nova Fund's long position.| Mid-cap 15x vs. Basic Materials Fund | Mid-cap 15x vs. Basic Materials Fund | Mid-cap 15x vs. Banking Fund Class | Mid-cap 15x vs. Basic Materials Fund |
| Nova Fund vs. Direxion Monthly Nasdaq 100 | Nova Fund vs. Ultranasdaq 100 Profund Ultranasdaq 100 | Nova Fund vs. Dow 2x Strategy |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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