Correlation Between Brinker Capital and Mid Cap

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

By analyzing existing cross correlation between Brinker Capital Destinations and Mid Cap 15x Strategy, you can compare the effects of market volatilities on Brinker Capital and Mid Cap 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 Brinker Capital with a short position of Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker Capital and Mid Cap.

Diversification Opportunities for Brinker Capital and Mid Cap

0.62

Correlation Coefficient

Brinker Capital  Mid Cap

Poor diversification

The 3 months correlation between Brinker and Mid is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Brinker Capital Destinations and Mid Cap 15x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap 15x and Brinker Capital 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 Brinker Capital Destinations are associated (or correlated) with Mid Cap. 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 15x has no effect on the direction of Brinker Capital i.e., Brinker Capital and Mid Cap go up and down completely randomly.

Pair Corralation between Brinker Capital and Mid Cap

Assuming the 90 days horizon Brinker Capital Destinations is expected to generate 0.4 times more return on investment than Mid Cap. However, Brinker Capital Destinations is 2.5 times less risky than Mid Cap. It trades about 0.02 of its potential returns per unit of risk. Mid Cap 15x Strategy is currently generating about -0.12 per unit of risk. If you would invest  1,175  in Brinker Capital Destinations on October 7, 2024 and sell it today you would earn a total of  5.00  from holding Brinker Capital Destinations or generate 0.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Brinker Capital Destinations  vs.  Mid Cap 15x Strategy

Brinker Capital Dest

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brinker Capital Destinations are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Brinker Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mid Cap 15x

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap 15x Strategy are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Mid Cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Brinker Capital and Mid Cap

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

The idea behind Brinker Capital Destinations and Mid Cap 15x Strategy 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.