Correlation Between Mid-cap Value and Mid Cap

Can any of the company-specific risk be diversified away by investing in both Mid-cap Value and Mid Cap 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 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 15x Strategy, you can compare the effects of market volatilities on Mid-cap Value and Mid Cap 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid-cap Value and Mid Cap.

Diversification Opportunities for Mid-cap Value and Mid Cap

0.99

Correlation Coefficient

Mid-cap Value  Mid Cap

No risk reduction

The 3 months correlation between Mid-cap and Mid is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Value Profund and Mid Cap 15x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap 15x 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. 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 15x has no effect on the direction of Mid-cap Value i.e., Mid-cap Value and Mid Cap go up and down completely randomly.

Pair Corralation between Mid-cap Value and Mid Cap

Assuming the 90 days horizon Mid-cap Value is expected to generate 2.22 times less return on investment than Mid Cap. But when comparing it to its historical volatility, Mid Cap Value Profund is 1.39 times less risky than Mid Cap. It trades about 0.03 of its potential returns per unit of risk. Mid Cap 15x Strategy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  9,958  in Mid Cap 15x Strategy on May 11, 2025 and sell it today you would earn a total of  290.00  from holding Mid Cap 15x Strategy or generate 2.91% 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 15x Strategy

Mid Cap Value

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap Value Profund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Mid-cap Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mid Cap 15x

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap 15x Strategy are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Mid Cap 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 Value and Mid Cap

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

The idea behind Mid Cap Value Profund and Mid Cap 15x Strategy 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.