Correlation Between Mid Cap and Performance Trust

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

By analyzing existing cross correlation between Mid Cap 15x Strategy and Performance Trust Strategic, you can compare the effects of market volatilities on Mid Cap and Performance Trust 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 with a short position of Performance Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Performance Trust.

Diversification Opportunities for Mid Cap and Performance Trust

0.67

Correlation Coefficient

Mid Cap  Performance Trust

Poor diversification

The 3 months correlation between Mid and Performance is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and Performance Trust Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Trust and Mid Cap 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 15x Strategy are associated (or correlated) with Performance Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Trust has no effect on the direction of Mid Cap i.e., Mid Cap and Performance Trust go up and down completely randomly.

Pair Corralation between Mid Cap and Performance Trust

Assuming the 90 days horizon Mid Cap 15x Strategy is expected to generate 4.79 times more return on investment than Performance Trust. However, Mid Cap is 4.79 times more volatile than Performance Trust Strategic. It trades about 0.09 of its potential returns per unit of risk. Performance Trust Strategic is currently generating about 0.15 per unit of risk. If you would invest  12,644  in Mid Cap 15x Strategy on May 17, 2025 and sell it today you would earn a total of  885.00  from holding Mid Cap 15x Strategy or generate 7.0% return on investment over 90 days.

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

Mid Cap 15x Strategy  vs.  Performance Trust Strategic

Mid Cap 15x

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap 15x Strategy are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Mid Cap may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Performance Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Trust Strategic are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Performance Trust 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 and Performance Trust

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

The idea behind Mid Cap 15x Strategy and Performance Trust Strategic 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.