Correlation Between Mid Cap and Ambrus Core

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

By analyzing existing cross correlation between Mid Cap Index and Ambrus Core Bond, you can compare the effects of market volatilities on Mid Cap and Ambrus Core 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 Ambrus Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Ambrus Core.

Diversification Opportunities for Mid Cap and Ambrus Core

-0.64

Correlation Coefficient

Mid Cap  Ambrus Core

Excellent diversification

The 3 months correlation between Mid and Ambrus is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Index and Ambrus Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambrus Core Bond 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 Index are associated (or correlated) with Ambrus Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambrus Core Bond has no effect on the direction of Mid Cap i.e., Mid Cap and Ambrus Core go up and down completely randomly.

Pair Corralation between Mid Cap and Ambrus Core

Assuming the 90 days horizon Mid Cap Index is expected to under-perform the Ambrus Core. In addition to that, Mid Cap is 10.63 times more volatile than Ambrus Core Bond. It trades about -0.15 of its total potential returns per unit of risk. Ambrus Core Bond is currently generating about 0.17 per unit of volatility. If you would invest  978.00  in Ambrus Core Bond on December 28, 2024 and sell it today you would earn a total of  19.00  from holding Ambrus Core Bond or generate 1.94% return on investment over 90 days.

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

Mid Cap Index  vs.  Ambrus Core Bond

Mid Cap Index

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mid Cap Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Ambrus Core Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ambrus Core Bond are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Ambrus Core 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 Ambrus Core

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

The idea behind Mid Cap Index and Ambrus Core Bond 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.