Correlation Between Mid Atlantic and ReposiTrak

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

By analyzing existing cross correlation between Mid Atlantic Home Health and ReposiTrak, you can compare the effects of market volatilities on Mid Atlantic and ReposiTrak 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 Mid Atlantic with a short position of ReposiTrak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Atlantic and ReposiTrak.

Diversification Opportunities for Mid Atlantic and ReposiTrak

0.0

Correlation Coefficient

Mid Atlantic  ReposiTrak

Pay attention - limited upside

The 3 months correlation between Mid and ReposiTrak is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mid Atlantic Home Health and ReposiTrak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReposiTrak and Mid Atlantic 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 Mid Atlantic Home Health are associated (or correlated) with ReposiTrak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReposiTrak has no effect on the direction of Mid Atlantic i.e., Mid Atlantic and ReposiTrak go up and down completely randomly.

Pair Corralation between Mid Atlantic and ReposiTrak

If you would invest  0.01  in Mid Atlantic Home Health on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Mid Atlantic Home Health or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mid Atlantic Home Health  vs.  ReposiTrak

Mid Atlantic Home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mid Atlantic Home Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Mid Atlantic is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

ReposiTrak

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ReposiTrak are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, ReposiTrak may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Mid Atlantic and ReposiTrak

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

The idea behind Mid Atlantic Home Health and ReposiTrak 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.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.