Correlation Between Energy Fund and Mid-cap 15x
Can any of the company-specific risk be diversified away by investing in both Energy Fund and Mid-cap 15x 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 Energy Fund and Mid-cap 15x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Fund Class and Mid Cap 15x Strategy, you can compare the effects of market volatilities on Energy Fund and Mid-cap 15x 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 Energy Fund with a short position of Mid-cap 15x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Fund and Mid-cap 15x.
Diversification Opportunities for Energy Fund and Mid-cap 15x
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Energy and Mid-cap is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Energy Fund Class and Mid Cap 15x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap 15x and Energy Fund 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 Energy Fund Class are associated (or correlated) with Mid-cap 15x. 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 15x has no effect on the direction of Energy Fund i.e., Energy Fund and Mid-cap 15x go up and down completely randomly.
Pair Corralation between Energy Fund and Mid-cap 15x
Assuming the 90 days horizon Energy Fund Class is expected to under-perform the Mid-cap 15x. But the mutual fund apears to be less risky and, when comparing its historical volatility, Energy Fund Class is 1.18 times less risky than Mid-cap 15x. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Mid Cap 15x Strategy is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 12,256 in Mid Cap 15x Strategy on March 26, 2025 and sell it today you would earn a total of 47.00 from holding Mid Cap 15x Strategy or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Fund Class vs. Mid Cap 15x Strategy
Performance |
| Timeline |
| Energy Fund Class |
| Mid Cap 15x |
Energy Fund and Mid-cap 15x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Fund and Mid-cap 15x
The main advantage of trading using opposite Energy Fund and Mid-cap 15x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Fund position performs unexpectedly, Mid-cap 15x 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 15x will offset losses from the drop in Mid-cap 15x's long position.| Energy Fund vs. Ab Bond Inflation | Energy Fund vs. Cref Inflation Linked Bond | Energy Fund vs. Short Duration Inflation | Energy Fund vs. Ab Bond Inflation |
| Mid-cap 15x vs. Artisan High Income | Mid-cap 15x vs. Calvert High Yield | Mid-cap 15x vs. Shenkman Short Duration | Mid-cap 15x vs. Federated High Yield |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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