Correlation Between Absolute Convertible and Mid-cap Profund
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Mid-cap Profund 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 Absolute Convertible and Mid-cap Profund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Mid Cap Profund Mid Cap, you can compare the effects of market volatilities on Absolute Convertible and Mid-cap Profund 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 Absolute Convertible with a short position of Mid-cap Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Mid-cap Profund.
Diversification Opportunities for Absolute Convertible and Mid-cap Profund
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Absolute and Mid-cap is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Mid Cap Profund Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Profund and Absolute Convertible 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 Absolute Convertible Arbitrage are associated (or correlated) with Mid-cap Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Profund has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Mid-cap Profund go up and down completely randomly.
Pair Corralation between Absolute Convertible and Mid-cap Profund
Assuming the 90 days horizon Absolute Convertible is expected to generate 3.66 times less return on investment than Mid-cap Profund. But when comparing it to its historical volatility, Absolute Convertible Arbitrage is 13.33 times less risky than Mid-cap Profund. It trades about 0.45 of its potential returns per unit of risk. Mid Cap Profund Mid Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,392 in Mid Cap Profund Mid Cap on June 12, 2025 and sell it today you would earn a total of 650.00 from holding Mid Cap Profund Mid Cap or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Mid Cap Profund Mid Cap
Performance |
| Timeline |
| Absolute Convertible |
| Mid Cap Profund |
Absolute Convertible and Mid-cap Profund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Mid-cap Profund
The main advantage of trading using opposite Absolute Convertible and Mid-cap Profund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible position performs unexpectedly, Mid-cap Profund 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 Mid-cap Profund will offset losses from the drop in Mid-cap Profund's long position.| Absolute Convertible vs. Calamos Market Neutral | Absolute Convertible vs. Calamos Market Neutral | Absolute Convertible vs. Calamos Market Neutral | Absolute Convertible vs. Aqr Diversified Arbitrage |
| Mid-cap Profund vs. The National Tax Free | Mid-cap Profund vs. Siit High Yield | Mid-cap Profund vs. Ambrus Core Bond | Mid-cap Profund vs. Artisan High Income |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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