Correlation Between Walden Midcap and Walden Smid
Can any of the company-specific risk be diversified away by investing in both Walden Midcap and Walden Smid 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 Walden Midcap and Walden Smid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walden Midcap Fund and Walden Smid Cap, you can compare the effects of market volatilities on Walden Midcap and Walden Smid 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 Walden Midcap with a short position of Walden Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walden Midcap and Walden Smid.
Diversification Opportunities for Walden Midcap and Walden Smid
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Walden and Walden is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Walden Midcap Fund and Walden Smid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walden Smid Cap and Walden 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 Walden Midcap Fund are associated (or correlated) with Walden Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walden Smid Cap has no effect on the direction of Walden Midcap i.e., Walden Midcap and Walden Smid go up and down completely randomly.
Pair Corralation between Walden Midcap and Walden Smid
Assuming the 90 days horizon Walden Midcap is expected to generate 3.47 times less return on investment than Walden Smid. But when comparing it to its historical volatility, Walden Midcap Fund is 1.06 times less risky than Walden Smid. It trades about 0.01 of its potential returns per unit of risk. Walden Smid Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,516 in Walden Smid Cap on November 4, 2024 and sell it today you would earn a total of 45.00 from holding Walden Smid Cap or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walden Midcap Fund vs. Walden Smid Cap
Performance |
| Timeline |
| Walden Midcap |
| Walden Smid Cap |
Walden Midcap and Walden Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walden Midcap and Walden Smid
The main advantage of trading using opposite Walden Midcap and Walden Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walden Midcap position performs unexpectedly, Walden Smid 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 Walden Smid will offset losses from the drop in Walden Smid's long position.| Walden Midcap vs. Boston Trust Midcap | Walden Midcap vs. Walden Equity Fund | Walden Midcap vs. Mid Cap Value | Walden Midcap vs. Blackrock Total Stock |
| Walden Smid vs. Walden Midcap Fund | Walden Smid vs. Calvert Small Cap | Walden Smid vs. Calvert International Equity | Walden Smid vs. Champlain Mid Cap |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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