Correlation Between World Precious and Midas Fund

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

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

Diversification Opportunities for World Precious and Midas Fund

0.87

Correlation Coefficient

World Precious  Midas Fund

Very poor diversification

The 3 months correlation between World and Midas is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding World Precious Minerals 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 World Precious 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 World Precious Minerals 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 World Precious i.e., World Precious and Midas Fund go up and down completely randomly.

Pair Corralation between World Precious and Midas Fund

Assuming the 90 days horizon World Precious Minerals is expected to generate 0.56 times more return on investment than Midas Fund. However, World Precious Minerals is 1.79 times less risky than Midas Fund. It trades about -0.14 of its potential returns per unit of risk. Midas Fund Midas is currently generating about -0.09 per unit of risk. If you would invest  193.00  in World Precious Minerals on February 19, 2025 and sell it today you would lose (10.00) from holding World Precious Minerals or give up 5.18% of portfolio value over 90 days.

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

World Precious Minerals  vs.  Midas Fund Midas

World Precious Minerals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in World Precious Minerals are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, World Precious may actually be approaching a critical reversion point that can send shares even higher in June 2025.

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 11 (%) 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 World Precious and Midas Fund

The main advantage of trading using opposite World Precious and Midas Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Precious 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 World Precious Minerals 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.