Correlation Between Upright Growth and Small Midcap

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

By analyzing existing cross correlation between Upright Growth Income and Small Midcap Dividend Income, you can compare the effects of market volatilities on Upright Growth and Small Midcap 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 Upright Growth with a short position of Small Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upright Growth and Small Midcap.

Diversification Opportunities for Upright Growth and Small Midcap

0.49

Correlation Coefficient

Upright Growth  Small Midcap

Very weak diversification

The 3 months correlation between Upright and Small is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Upright Growth Income and Small Midcap Dividend Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Midcap Dividend and Upright Growth 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 Upright Growth Income are associated (or correlated) with Small Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Midcap Dividend has no effect on the direction of Upright Growth i.e., Upright Growth and Small Midcap go up and down completely randomly.

Pair Corralation between Upright Growth and Small Midcap

Assuming the 90 days horizon Upright Growth Income is expected to generate 1.55 times more return on investment than Small Midcap. However, Upright Growth is 1.55 times more volatile than Small Midcap Dividend Income. It trades about 0.35 of its potential returns per unit of risk. Small Midcap Dividend Income is currently generating about 0.18 per unit of risk. If you would invest  1,680  in Upright Growth Income on May 1, 2025 and sell it today you would earn a total of  639.00  from holding Upright Growth Income or generate 38.04% return on investment over 90 days.

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

Upright Growth Income  vs.  Small Midcap Dividend Income

Upright Growth Income

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Upright Growth Income are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Upright Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Small Midcap Dividend

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Small Midcap Dividend Income are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Small Midcap may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Upright Growth and Small Midcap

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

The idea behind Upright Growth Income and Small Midcap Dividend Income 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.