Correlation Between Bear Profund and Mid-cap Value

Can any of the company-specific risk be diversified away by investing in both Bear Profund and Mid-cap Value 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 Bear Profund and Mid-cap Value into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bear Profund Bear and Mid Cap Value Profund, you can compare the effects of market volatilities on Bear Profund and Mid-cap Value 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 Bear Profund with a short position of Mid-cap Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bear Profund and Mid-cap Value.

Diversification Opportunities for Bear Profund and Mid-cap Value

-0.93

Correlation Coefficient

Bear Profund  Mid-cap Value

Pay attention - limited upside

The 3 months correlation between Bear and Mid-cap is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bear Profund Bear and Mid Cap Value Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Value and Bear Profund 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 Bear Profund Bear are associated (or correlated) with Mid-cap Value. 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 Value has no effect on the direction of Bear Profund i.e., Bear Profund and Mid-cap Value go up and down completely randomly.

Pair Corralation between Bear Profund and Mid-cap Value

Assuming the 90 days horizon Bear Profund Bear is expected to generate 1.05 times more return on investment than Mid-cap Value. However, Bear Profund is 1.05 times more volatile than Mid Cap Value Profund. It trades about 0.1 of its potential returns per unit of risk. Mid Cap Value Profund is currently generating about -0.07 per unit of risk. If you would invest  968.00  in Bear Profund Bear on December 29, 2024 and sell it today you would earn a total of  61.00  from holding Bear Profund Bear or generate 6.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Bear Profund Bear  vs.  Mid Cap Value Profund

Bear Profund Bear

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bear Profund Bear are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Bear Profund may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Mid Cap Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mid Cap Value Profund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Mid-cap Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bear Profund and Mid-cap Value

The main advantage of trading using opposite Bear Profund and Mid-cap Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bear Profund position performs unexpectedly, Mid-cap Value 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 Value will offset losses from the drop in Mid-cap Value's long position.

The idea behind Bear Profund Bear and Mid Cap Value Profund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.