Correlation Between Mid-cap Value and Mid-cap Profund

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

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

Diversification Opportunities for Mid-cap Value and Mid-cap Profund

0.99

Correlation Coefficient

Mid-cap Value  Mid-cap Profund

No risk reduction

The 3 months correlation between Mid-cap and Mid-cap is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Value Profund and Mid Cap Profund Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Profund and Mid-cap Value 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 Value Profund are associated (or correlated) with Mid-cap Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Profund has no effect on the direction of Mid-cap Value i.e., Mid-cap Value and Mid-cap Profund go up and down completely randomly.

Pair Corralation between Mid-cap Value and Mid-cap Profund

Assuming the 90 days horizon Mid Cap Value Profund is expected to generate 1.0 times more return on investment than Mid-cap Profund. However, Mid Cap Value Profund is 1.0 times less risky than Mid-cap Profund. It trades about 0.05 of its potential returns per unit of risk. Mid Cap Profund Mid Cap is currently generating about 0.05 per unit of risk. If you would invest  9,227  in Mid Cap Value Profund on April 16, 2025 and sell it today you would earn a total of  2,392  from holding Mid Cap Value Profund or generate 25.92% 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 Value Profund  vs.  Mid Cap Profund Mid Cap

Mid Cap Value

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap Value Profund 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 Value showed solid returns over the last few months and may actually be approaching a breakup point.

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 19 (%) 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.

Pair Trading with Mid-cap Value and Mid-cap Profund

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

The idea behind Mid Cap Value Profund and Mid Cap Profund Mid Cap 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.