Correlation Between Slow Capital and Midcap Growth
Can any of the company-specific risk be diversified away by investing in both Slow Capital and Midcap Growth 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 Slow Capital and Midcap Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Slow Capital Growth and Midcap Growth Fund, you can compare the effects of market volatilities on Slow Capital and Midcap Growth 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 Slow Capital with a short position of Midcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slow Capital and Midcap Growth.
Diversification Opportunities for Slow Capital and Midcap Growth
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Slow and Midcap is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Slow Capital Growth and Midcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Growth and Slow Capital 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 Slow Capital Growth are associated (or correlated) with Midcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Growth has no effect on the direction of Slow Capital i.e., Slow Capital and Midcap Growth go up and down completely randomly.
Pair Corralation between Slow Capital and Midcap Growth
Assuming the 90 days horizon Slow Capital is expected to generate 2.59 times less return on investment than Midcap Growth. But when comparing it to its historical volatility, Slow Capital Growth is 1.15 times less risky than Midcap Growth. It trades about 0.09 of its potential returns per unit of risk. Midcap Growth Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 996.00 in Midcap Growth Fund on May 27, 2025 and sell it today you would earn a total of 122.00 from holding Midcap Growth Fund or generate 12.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Slow Capital Growth vs. Midcap Growth Fund
Performance |
| Timeline |
| Slow Capital Growth |
| Midcap Growth |
Slow Capital and Midcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Slow Capital and Midcap Growth
The main advantage of trading using opposite Slow Capital and Midcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slow Capital position performs unexpectedly, Midcap Growth 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 Midcap Growth will offset losses from the drop in Midcap Growth's long position.| Slow Capital vs. Rational Defensive Growth | Slow Capital vs. Neuberger Berman E | Slow Capital vs. Vanguard 500 Index | Slow Capital vs. Pimco Stocksplus Small |
| Midcap Growth vs. Energy Basic Materials | Midcap Growth vs. Icon Natural Resources | Midcap Growth vs. Dreyfus Natural Resources | Midcap Growth vs. Goehring Rozencwajg Resources |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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