Correlation Between Technology Fund and Mid-cap 15x

Can any of the company-specific risk be diversified away by investing in both Technology Fund and Mid-cap 15x 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 Technology Fund and Mid-cap 15x into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Technology Fund and Mid-cap 15x

0.77

Correlation Coefficient

Technology Fund  Mid-cap 15x

Poor diversification

The 3 months correlation between Technology and Mid-cap is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Technology Fund Class 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 Technology 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 Technology Fund Class are associated (or correlated) with Mid-cap 15x. 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 Technology Fund i.e., Technology Fund and Mid-cap 15x go up and down completely randomly.

Pair Corralation between Technology Fund and Mid-cap 15x

Assuming the 90 days horizon Technology Fund Class is expected to generate 0.68 times more return on investment than Mid-cap 15x. However, Technology Fund Class is 1.46 times less risky than Mid-cap 15x. It trades about 0.21 of its potential returns per unit of risk. Mid Cap 15x Strategy is currently generating about 0.09 per unit of risk. If you would invest  16,692  in Technology Fund Class on June 30, 2025 and sell it today you would earn a total of  2,120  from holding Technology Fund Class or generate 12.7% return on investment over 90 days.

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

Technology Fund Class  vs.  Mid Cap 15x Strategy

Technology Fund Class

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Technology Fund Class are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Technology Fund may actually be approaching a critical reversion point that can send shares even higher in October 2025.

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 fundamental indicators, Mid-cap 15x may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Technology Fund and Mid-cap 15x

The main advantage of trading using opposite Technology Fund and Mid-cap 15x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technology Fund position performs unexpectedly, Mid-cap 15x 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 15x will offset losses from the drop in Mid-cap 15x's long position.

The idea behind Technology Fund Class 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.