Correlation Between Mid-cap 15x and Extended Market
Can any of the company-specific risk be diversified away by investing in both Mid-cap 15x and Extended Market 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 Extended Market 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 Extended Market Index, you can compare the effects of market volatilities on Mid-cap 15x and Extended Market 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 Extended Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid-cap 15x and Extended Market.
Diversification Opportunities for Mid-cap 15x and Extended Market
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mid-cap and Extended is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and Extended Market Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extended Market Index 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 Extended Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extended Market Index has no effect on the direction of Mid-cap 15x i.e., Mid-cap 15x and Extended Market go up and down completely randomly.
Pair Corralation between Mid-cap 15x and Extended Market
Assuming the 90 days horizon Mid Cap 15x Strategy is expected to under-perform the Extended Market. In addition to that, Mid-cap 15x is 1.42 times more volatile than Extended Market Index. It trades about -0.09 of its total potential returns per unit of risk. Extended Market Index is currently generating about -0.09 per unit of volatility. If you would invest 2,092 in Extended Market Index on December 26, 2024 and sell it today you would lose (133.00) from holding Extended Market Index or give up 6.36% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.36% |
Values | Daily Returns |
Mid Cap 15x Strategy vs. Extended Market Index
Performance |
Timeline |
Mid Cap 15x |
Extended Market Index |
Mid-cap 15x and Extended Market Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mid-cap 15x and Extended Market
The main advantage of trading using opposite Mid-cap 15x and Extended Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid-cap 15x position performs unexpectedly, Extended Market 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 Extended Market will offset losses from the drop in Extended Market's long position.Mid-cap 15x vs. Transamerica Capital Growth | Mid-cap 15x vs. Small Pany Growth | Mid-cap 15x vs. Vanguard Dividend Growth | Mid-cap 15x vs. T Rowe Price |
Extended Market vs. Old Westbury Small | Extended Market vs. Cardinal Small Cap | Extended Market vs. Legg Mason Partners | Extended Market vs. Touchstone Small Cap |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |