Correlation Between Walden Smid and Mid-cap Growth
Can any of the company-specific risk be diversified away by investing in both Walden Smid and Mid-cap Growth 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 Smid and Mid-cap Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walden Smid Cap and Mid Cap Growth Profund, you can compare the effects of market volatilities on Walden Smid and Mid-cap Growth 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 Smid with a short position of Mid-cap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walden Smid and Mid-cap Growth.
Diversification Opportunities for Walden Smid and Mid-cap Growth
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Walden and Mid-cap is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Walden Smid Cap and Mid Cap Growth Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Growth and Walden Smid 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 Smid Cap are associated (or correlated) with Mid-cap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Growth has no effect on the direction of Walden Smid i.e., Walden Smid and Mid-cap Growth go up and down completely randomly.
Pair Corralation between Walden Smid and Mid-cap Growth
Assuming the 90 days horizon Walden Smid is expected to generate 2.53 times less return on investment than Mid-cap Growth. But when comparing it to its historical volatility, Walden Smid Cap is 1.11 times less risky than Mid-cap Growth. It trades about 0.03 of its potential returns per unit of risk. Mid Cap Growth Profund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 10,731 in Mid Cap Growth Profund on October 25, 2024 and sell it today you would earn a total of 490.00 from holding Mid Cap Growth Profund or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walden Smid Cap vs. Mid Cap Growth Profund
Performance |
| Timeline |
| Walden Smid Cap |
| Mid Cap Growth |
Walden Smid and Mid-cap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walden Smid and Mid-cap Growth
The main advantage of trading using opposite Walden Smid and Mid-cap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walden Smid position performs unexpectedly, Mid-cap Growth 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-cap Growth will offset losses from the drop in Mid-cap Growth's long position.| Walden Smid vs. Walden Midcap Fund | Walden Smid vs. Calvert Small Cap | Walden Smid vs. Calvert International Equity | Walden Smid vs. Champlain Mid Cap |
| Mid-cap Growth vs. Small Cap Growth Profund | Mid-cap Growth vs. Mid Cap Value Profund | Mid-cap Growth vs. Small Cap Value Profund | Mid-cap Growth vs. Mid Cap Profund 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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