Correlation Between Biotechnology Ultrasector and Midas Fund

Can any of the company-specific risk be diversified away by investing in both Biotechnology Ultrasector and Midas Fund 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 Biotechnology Ultrasector and Midas Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Biotechnology Ultrasector Profund and Midas Fund Midas, you can compare the effects of market volatilities on Biotechnology Ultrasector and Midas Fund 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 Biotechnology Ultrasector with a short position of Midas Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biotechnology Ultrasector and Midas Fund.

Diversification Opportunities for Biotechnology Ultrasector and Midas Fund

0.81

Correlation Coefficient

Biotechnology Ultrasector  Midas Fund

Very poor diversification

The 3 months correlation between Biotechnology and Midas is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Biotechnology Ultrasector Prof and Midas Fund Midas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midas Fund Midas and Biotechnology Ultrasector 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 Biotechnology Ultrasector Profund are associated (or correlated) with Midas Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midas Fund Midas has no effect on the direction of Biotechnology Ultrasector i.e., Biotechnology Ultrasector and Midas Fund go up and down completely randomly.

Pair Corralation between Biotechnology Ultrasector and Midas Fund

Assuming the 90 days horizon Biotechnology Ultrasector Profund is expected to generate 0.85 times more return on investment than Midas Fund. However, Biotechnology Ultrasector Profund is 1.17 times less risky than Midas Fund. It trades about 0.27 of its potential returns per unit of risk. Midas Fund Midas is currently generating about 0.23 per unit of risk. If you would invest  4,314  in Biotechnology Ultrasector Profund on August 14, 2025 and sell it today you would earn a total of  1,804  from holding Biotechnology Ultrasector Profund or generate 41.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Biotechnology Ultrasector Prof  vs.  Midas Fund Midas

Biotechnology Ultrasector

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Biotechnology Ultrasector Profund are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Biotechnology Ultrasector showed solid returns over the last few months and may actually be approaching a breakup point.

Midas Fund Midas

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Midas Fund Midas are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Midas Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biotechnology Ultrasector and Midas Fund

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

The idea behind Biotechnology Ultrasector Profund and Midas Fund Midas 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.