Correlation Between Mid Cap and Bts Tactical

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

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

Diversification Opportunities for Mid Cap and Bts Tactical

0.34

Correlation Coefficient

Mid Cap  Bts Tactical

Weak diversification

The 3 months correlation between Mid and Bts is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Growth Profund and Bts Tactical Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bts Tactical Fixed and Mid Cap 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 Growth Profund are associated (or correlated) with Bts Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bts Tactical Fixed has no effect on the direction of Mid Cap i.e., Mid Cap and Bts Tactical go up and down completely randomly.

Pair Corralation between Mid Cap and Bts Tactical

Assuming the 90 days horizon Mid Cap Growth Profund is expected to generate 4.25 times more return on investment than Bts Tactical. However, Mid Cap is 4.25 times more volatile than Bts Tactical Fixed. It trades about 0.21 of its potential returns per unit of risk. Bts Tactical Fixed is currently generating about 0.18 per unit of risk. If you would invest  9,568  in Mid Cap Growth Profund on April 26, 2025 and sell it today you would earn a total of  1,248  from holding Mid Cap Growth Profund or generate 13.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Mid Cap Growth Profund  vs.  Bts Tactical Fixed

Mid Cap Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap Growth Profund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Mid Cap showed solid returns over the last few months and may actually be approaching a breakup point.

Bts Tactical Fixed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bts Tactical Fixed are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Bts Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mid Cap and Bts Tactical

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

The idea behind Mid Cap Growth Profund and Bts Tactical Fixed 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.