Correlation Between Great West and Mid Cap

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

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

Diversification Opportunities for Great West and Mid Cap

0.8

Correlation Coefficient

Great West  Mid Cap

Very poor diversification

The 3 months correlation between Great and Mid is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Great West Loomis Sayles and Mid Cap Value Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Value and Great West 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 Great West Loomis Sayles 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 Value has no effect on the direction of Great West i.e., Great West and Mid Cap go up and down completely randomly.

Pair Corralation between Great West and Mid Cap

Assuming the 90 days horizon Great West Loomis Sayles is expected to generate 1.08 times more return on investment than Mid Cap. However, Great West is 1.08 times more volatile than Mid Cap Value Profund. It trades about 0.03 of its potential returns per unit of risk. Mid Cap Value Profund is currently generating about 0.02 per unit of risk. If you would invest  3,355  in Great West Loomis Sayles on May 4, 2025 and sell it today you would earn a total of  488.00  from holding Great West Loomis Sayles or generate 14.55% return on investment over 90 days.

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

Great West Loomis Sayles  vs.  Mid Cap Value Profund

Great West Loomis

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Loomis Sayles are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Great West may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Mid Cap Value

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap Value Profund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic 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 Great West and Mid Cap

The main advantage of trading using opposite Great West and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West 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 Great West Loomis Sayles and Mid Cap Value Profund 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.