Correlation Between MidCap Financial and Corporate Travel
Can any of the company-specific risk be diversified away by investing in both MidCap Financial and Corporate Travel 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 MidCap Financial and Corporate Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MidCap Financial Investment and Corporate Travel Management, you can compare the effects of market volatilities on MidCap Financial and Corporate Travel 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 MidCap Financial with a short position of Corporate Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and Corporate Travel.
Diversification Opportunities for MidCap Financial and Corporate Travel
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MidCap and Corporate is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man and MidCap 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 MidCap Financial Investment are associated (or correlated) with Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of MidCap Financial i.e., MidCap Financial and Corporate Travel go up and down completely randomly.
Pair Corralation between MidCap Financial and Corporate Travel
Assuming the 90 days trading horizon MidCap Financial Investment is expected to under-perform the Corporate Travel. But the stock apears to be less risky and, when comparing its historical volatility, MidCap Financial Investment is 2.16 times less risky than Corporate Travel. The stock trades about -0.08 of its potential returns per unit of risk. The Corporate Travel Management is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 765.00 in Corporate Travel Management on December 24, 2024 and sell it today you would earn a total of 50.00 from holding Corporate Travel Management or generate 6.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MidCap Financial Investment vs. Corporate Travel Management
Performance |
Timeline |
MidCap Financial Inv |
Corporate Travel Man |
MidCap Financial and Corporate Travel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MidCap Financial and Corporate Travel
The main advantage of trading using opposite MidCap Financial and Corporate Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial position performs unexpectedly, Corporate Travel 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 Corporate Travel will offset losses from the drop in Corporate Travel's long position.MidCap Financial vs. Datang International Power | MidCap Financial vs. FRACTAL GAMING GROUP | MidCap Financial vs. Media and Games | MidCap Financial vs. Cass Information Systems |
Corporate Travel vs. Alfa Financial Software | Corporate Travel vs. Firan Technology Group | Corporate Travel vs. Take Two Interactive Software | Corporate Travel vs. PKSHA TECHNOLOGY INC |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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