Correlation Between SVB Financial and Mid America
Can any of the company-specific risk be diversified away by investing in both SVB Financial and Mid America 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 SVB Financial and Mid America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SVB Financial Group and Mid America Apartment Communities, you can compare the effects of market volatilities on SVB Financial and Mid America 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 SVB Financial with a short position of Mid America. Check out your portfolio center. Please also check ongoing floating volatility patterns of SVB Financial and Mid America.
Diversification Opportunities for SVB Financial and Mid America
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SVB and Mid is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SVB Financial Group and Mid America Apartment Communit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid America Apartment and SVB 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 SVB Financial Group are associated (or correlated) with Mid America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid America Apartment has no effect on the direction of SVB Financial i.e., SVB Financial and Mid America go up and down completely randomly.
Pair Corralation between SVB Financial and Mid America
Assuming the 90 days trading horizon SVB Financial Group is expected to under-perform the Mid America. In addition to that, SVB Financial is 1.45 times more volatile than Mid America Apartment Communities. It trades about -0.07 of its total potential returns per unit of risk. Mid America Apartment Communities is currently generating about 0.05 per unit of volatility. If you would invest 19,657 in Mid America Apartment Communities on November 9, 2024 and sell it today you would earn a total of 3,573 from holding Mid America Apartment Communities or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 45.92% |
| Values | Daily Returns |
SVB Financial Group vs. Mid America Apartment Communit
Performance |
| Timeline |
| SVB Financial Group |
| Mid America Apartment |
SVB Financial and Mid America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SVB Financial and Mid America
The main advantage of trading using opposite SVB Financial and Mid America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SVB Financial position performs unexpectedly, Mid America 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 Mid America will offset losses from the drop in Mid America's long position.| SVB Financial vs. SK Telecom Co, | SVB Financial vs. Spotify Technology SA | SVB Financial vs. Metalurgica Gerdau SA | SVB Financial vs. Chunghwa Telecom Co, |
| Mid America vs. Take Two Interactive Software | Mid America vs. Align Technology | Mid America vs. Datadog, | Mid America vs. CVS Health |
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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