Correlation Between Ultrashort Mid-cap and Midas Fund

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

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

Diversification Opportunities for Ultrashort Mid-cap and Midas Fund

0.02

Correlation Coefficient

Ultrashort Mid-cap  Midas Fund

Significant diversification

The 3 months correlation between Ultrashort and Midas is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ultrashort Mid Cap Profund and Midas Fund Midas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midas Fund Midas and Ultrashort 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 Ultrashort Mid Cap Profund are associated (or correlated) with Midas Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midas Fund Midas has no effect on the direction of Ultrashort Mid-cap i.e., Ultrashort Mid-cap and Midas Fund go up and down completely randomly.

Pair Corralation between Ultrashort Mid-cap and Midas Fund

Assuming the 90 days horizon Ultrashort Mid Cap Profund is expected to under-perform the Midas Fund. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ultrashort Mid Cap Profund is 1.0 times less risky than Midas Fund. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Midas Fund Midas is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  198.00  in Midas Fund Midas on May 21, 2025 and sell it today you would earn a total of  28.00  from holding Midas Fund Midas or generate 14.14% return on investment over 90 days.

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

Ultrashort Mid Cap Profund  vs.  Midas Fund Midas

Ultrashort Mid Cap

Risk-Adjusted Performance

Weakest

Over the last 90 days Ultrashort Mid Cap Profund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Midas Fund Midas

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Midas Fund Midas are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Midas Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ultrashort Mid-cap and Midas Fund

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

The idea behind Ultrashort Mid Cap Profund and Midas Fund Midas 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.

Check out your portfolio center.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.