Correlation Between Mid-cap 15x and Applied Finance

Can any of the company-specific risk be diversified away by investing in both Mid-cap 15x and Applied Finance 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-cap 15x and Applied Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Mid-cap 15x and Applied Finance

0.0

Correlation Coefficient

Mid-cap 15x  Applied Finance

Pay attention - limited upside

The 3 months correlation between Mid-cap and Applied is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and Applied Finance Explorer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Finance Explorer and Mid-cap 15x 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 Cap 15x Strategy are associated (or correlated) with Applied Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Finance Explorer has no effect on the direction of Mid-cap 15x i.e., Mid-cap 15x and Applied Finance go up and down completely randomly.

Pair Corralation between Mid-cap 15x and Applied Finance

If you would invest  2,254  in Applied Finance Explorer on October 24, 2024 and sell it today you would earn a total of  33.00  from holding Applied Finance Explorer or generate 1.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Mid Cap 15x Strategy  vs.  Applied Finance Explorer

Mid Cap 15x

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Mid Cap 15x Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Mid-cap 15x is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Applied Finance Explorer

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Finance Explorer are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Applied Finance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mid-cap 15x and Applied Finance

The main advantage of trading using opposite Mid-cap 15x and Applied Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid-cap 15x position performs unexpectedly, Applied Finance 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 Applied Finance will offset losses from the drop in Applied Finance's long position.

The idea behind Mid Cap 15x Strategy and Applied Finance Explorer 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.