Correlation Between Midas Fund and Spectrum Fund

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

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

Diversification Opportunities for Midas Fund and Spectrum Fund

0.47

Correlation Coefficient

Midas Fund  Spectrum Fund

Very weak diversification

The 3 months correlation between Midas and Spectrum is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Midas Fund Midas and Spectrum Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Fund Instit and Midas 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 Midas Fund Midas are associated (or correlated) with Spectrum Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Fund Instit has no effect on the direction of Midas Fund i.e., Midas Fund and Spectrum Fund go up and down completely randomly.

Pair Corralation between Midas Fund and Spectrum Fund

Assuming the 90 days horizon Midas Fund Midas is expected to generate 3.25 times more return on investment than Spectrum Fund. However, Midas Fund is 3.25 times more volatile than Spectrum Fund Institutional. It trades about 0.13 of its potential returns per unit of risk. Spectrum Fund Institutional is currently generating about 0.26 per unit of risk. If you would invest  202.00  in Midas Fund Midas on May 26, 2025 and sell it today you would earn a total of  31.00  from holding Midas Fund Midas or generate 15.35% return on investment over 90 days.

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

Midas Fund Midas  vs.  Spectrum Fund Institutional

Midas Fund Midas

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Midas Fund Midas are ranked lower than 10 (%) 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.

Spectrum Fund Instit

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spectrum Fund Institutional are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Spectrum Fund may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Midas Fund and Spectrum Fund

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

The idea behind Midas Fund Midas and Spectrum Fund Institutional 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.