Correlation Between Mid Cap and Greenspring Income

Can any of the company-specific risk be diversified away by investing in both Mid Cap and Greenspring Income 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 and Greenspring Income 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 Greenspring Income Opportunities, you can compare the effects of market volatilities on Mid Cap and Greenspring Income 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 with a short position of Greenspring Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Greenspring Income.

Diversification Opportunities for Mid Cap and Greenspring Income

0.84

Correlation Coefficient

Mid Cap  Greenspring Income

Very poor diversification

The 3 months correlation between Mid and Greenspring is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and Greenspring Income Opportuniti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenspring Income and Mid Cap 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 Greenspring Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenspring Income has no effect on the direction of Mid Cap i.e., Mid Cap and Greenspring Income go up and down completely randomly.

Pair Corralation between Mid Cap and Greenspring Income

If you would invest  13,842  in Mid Cap 15x Strategy on September 16, 2024 and sell it today you would earn a total of  336.00  from holding Mid Cap 15x Strategy or generate 2.43% return on investment over 90 days.

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

Mid Cap 15x Strategy  vs.  Greenspring Income Opportuniti

Mid Cap 15x

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap 15x Strategy are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Mid Cap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Greenspring Income

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Greenspring Income Opportunities are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Greenspring Income 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 and Greenspring Income

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

The idea behind Mid Cap 15x Strategy and Greenspring Income Opportunities 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.