Correlation Between Sp Midcap and Oshaughnessy Market
Can any of the company-specific risk be diversified away by investing in both Sp Midcap and Oshaughnessy Market 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 Sp Midcap and Oshaughnessy Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp Midcap Index and Oshaughnessy Market Leaders, you can compare the effects of market volatilities on Sp Midcap and Oshaughnessy Market 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 Sp Midcap with a short position of Oshaughnessy Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Midcap and Oshaughnessy Market.
Diversification Opportunities for Sp Midcap and Oshaughnessy Market
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPMIX and Oshaughnessy is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sp Midcap Index and Oshaughnessy Market Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshaughnessy Market and Sp Midcap 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 Sp Midcap Index are associated (or correlated) with Oshaughnessy Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshaughnessy Market has no effect on the direction of Sp Midcap i.e., Sp Midcap and Oshaughnessy Market go up and down completely randomly.
Pair Corralation between Sp Midcap and Oshaughnessy Market
Assuming the 90 days horizon Sp Midcap Index is expected to generate 0.37 times more return on investment than Oshaughnessy Market. However, Sp Midcap Index is 2.69 times less risky than Oshaughnessy Market. It trades about -0.25 of its potential returns per unit of risk. Oshaughnessy Market Leaders is currently generating about -0.27 per unit of risk. If you would invest 2,708 in Sp Midcap Index on October 10, 2024 and sell it today you would lose (143.00) from holding Sp Midcap Index or give up 5.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sp Midcap Index vs. Oshaughnessy Market Leaders
Performance |
| Timeline |
| Sp Midcap Index |
| Oshaughnessy Market |
Sp Midcap and Oshaughnessy Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp Midcap and Oshaughnessy Market
The main advantage of trading using opposite Sp Midcap and Oshaughnessy Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp Midcap position performs unexpectedly, Oshaughnessy Market 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 Oshaughnessy Market will offset losses from the drop in Oshaughnessy Market's long position.| Sp Midcap vs. Locorr Dynamic Equity | Sp Midcap vs. Ab Equity Income | Sp Midcap vs. Dws Equity Sector | Sp Midcap vs. Smallcap World Fund |
| Oshaughnessy Market vs. Barings Global Floating | Oshaughnessy Market vs. Ab Global Bond | Oshaughnessy Market vs. Harding Loevner Global | Oshaughnessy Market vs. Ms Global Fixed |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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