Correlation Between Unified Series and Mid Cap

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

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

Diversification Opportunities for Unified Series and Mid Cap

0.96

Correlation Coefficient

Unified Series  Mid Cap

Almost no diversification

The 3 months correlation between Unified and Mid is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Unified Series Trust and Mid Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Growth and Unified Series 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 Unified Series Trust are associated (or correlated) with Mid Cap. 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 Growth has no effect on the direction of Unified Series i.e., Unified Series and Mid Cap go up and down completely randomly.

Pair Corralation between Unified Series and Mid Cap

Given the investment horizon of 90 days Unified Series Trust is expected to generate 0.68 times more return on investment than Mid Cap. However, Unified Series Trust is 1.48 times less risky than Mid Cap. It trades about -0.18 of its potential returns per unit of risk. Mid Cap Growth is currently generating about -0.18 per unit of risk. If you would invest  2,706  in Unified Series Trust on January 26, 2024 and sell it today you would lose (79.00) from holding Unified Series Trust or give up 2.92% of portfolio value over 90 days.

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

Unified Series Trust  vs.  Mid Cap Growth

Unified Series Trust

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Unified Series Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Unified Series is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Mid Cap Growth

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap Growth are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mid Cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Unified Series and Mid Cap

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

The idea behind Unified Series Trust and Mid Cap Growth 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.