Correlation Between Mid-cap Profund and Enhanced

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

By analyzing existing cross correlation between Mid Cap Profund Mid Cap and Enhanced Large Pany, you can compare the effects of market volatilities on Mid-cap Profund and Enhanced 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 Profund with a short position of Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid-cap Profund and Enhanced.

Diversification Opportunities for Mid-cap Profund and Enhanced

0.98

Correlation Coefficient

Mid-cap Profund  Enhanced

Almost no diversification

The 3 months correlation between Mid-cap and Enhanced is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Profund Mid Cap and Enhanced Large Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhanced Large Pany and Mid-cap Profund 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 Profund Mid Cap are associated (or correlated) with Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enhanced Large Pany has no effect on the direction of Mid-cap Profund i.e., Mid-cap Profund and Enhanced go up and down completely randomly.

Pair Corralation between Mid-cap Profund and Enhanced

Assuming the 90 days horizon Mid-cap Profund is expected to generate 1.28 times less return on investment than Enhanced. In addition to that, Mid-cap Profund is 1.2 times more volatile than Enhanced Large Pany. It trades about 0.24 of its total potential returns per unit of risk. Enhanced Large Pany is currently generating about 0.36 per unit of volatility. If you would invest  1,319  in Enhanced Large Pany on April 22, 2025 and sell it today you would earn a total of  264.00  from holding Enhanced Large Pany or generate 20.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Mid Cap Profund Mid Cap  vs.  Enhanced Large Pany

Mid Cap Profund

Risk-Adjusted Performance

Solid

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

Enhanced Large Pany

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Enhanced Large Pany are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Enhanced showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mid-cap Profund and Enhanced

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

The idea behind Mid Cap Profund Mid Cap and Enhanced Large Pany 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.