Correlation Between MidCap Financial and DATAGROUP

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

By analyzing existing cross correlation between MidCap Financial Investment and DATAGROUP SE, you can compare the effects of market volatilities on MidCap Financial and DATAGROUP 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 MidCap Financial with a short position of DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and DATAGROUP.

Diversification Opportunities for MidCap Financial and DATAGROUP

0.37

Correlation Coefficient

MidCap Financial  DATAGROUP

Weak diversification

The 3 months correlation between MidCap and DATAGROUP is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE and MidCap Financial 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 MidCap Financial Investment are associated (or correlated) with DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of MidCap Financial i.e., MidCap Financial and DATAGROUP go up and down completely randomly.

Pair Corralation between MidCap Financial and DATAGROUP

Assuming the 90 days trading horizon MidCap Financial is expected to generate 1.1 times less return on investment than DATAGROUP. In addition to that, MidCap Financial is 1.6 times more volatile than DATAGROUP SE. It trades about 0.12 of its total potential returns per unit of risk. DATAGROUP SE is currently generating about 0.2 per unit of volatility. If you would invest  5,470  in DATAGROUP SE on April 24, 2025 and sell it today you would earn a total of  630.00  from holding DATAGROUP SE or generate 11.52% return on investment over 90 days.

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

MidCap Financial Investment  vs.  DATAGROUP SE

MidCap Financial Inv

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MidCap Financial Investment are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MidCap Financial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

DATAGROUP SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DATAGROUP SE are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, DATAGROUP may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with MidCap Financial and DATAGROUP

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

The idea behind MidCap Financial Investment and DATAGROUP SE 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.