Correlation Between Midcap Fund and At Mid

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

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

Diversification Opportunities for Midcap Fund and At Mid

0.95

Correlation Coefficient

Midcap Fund  At Mid

Almost no diversification

The 3 months correlation between Midcap and AWMIX is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Midcap Fund Institutional and At Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on At Mid Cap and Midcap 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 Midcap Fund Institutional are associated (or correlated) with At Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of At Mid Cap has no effect on the direction of Midcap Fund i.e., Midcap Fund and At Mid go up and down completely randomly.

Pair Corralation between Midcap Fund and At Mid

Assuming the 90 days horizon Midcap Fund is expected to generate 1.2 times less return on investment than At Mid. But when comparing it to its historical volatility, Midcap Fund Institutional is 1.05 times less risky than At Mid. It trades about 0.09 of its potential returns per unit of risk. At Mid Cap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,955  in At Mid Cap on May 21, 2025 and sell it today you would earn a total of  92.00  from holding At Mid Cap or generate 4.71% return on investment over 90 days.

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

Midcap Fund Institutional  vs.  At Mid Cap

Midcap Fund Institutional

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Midcap Fund Institutional are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Midcap Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

At Mid Cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in At Mid Cap are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, At Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Midcap Fund and At Mid

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

The idea behind Midcap Fund Institutional and At 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.