Correlation Between Middlefield Equity and Middlefield Global

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

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

Diversification Opportunities for Middlefield Equity and Middlefield Global

0.95

Correlation Coefficient

Middlefield Equity  Middlefield Global

Almost no diversification

The 3 months correlation between Middlefield and Middlefield is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Middlefield Equity Dividend and Middlefield Global Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Middlefield Global and Middlefield Equity 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 Middlefield Equity Dividend are associated (or correlated) with Middlefield Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Middlefield Global has no effect on the direction of Middlefield Equity i.e., Middlefield Equity and Middlefield Global go up and down completely randomly.

Pair Corralation between Middlefield Equity and Middlefield Global

Assuming the 90 days trading horizon Middlefield Equity is expected to generate 1.25 times less return on investment than Middlefield Global. In addition to that, Middlefield Equity is 1.15 times more volatile than Middlefield Global Dividend. It trades about 0.16 of its total potential returns per unit of risk. Middlefield Global Dividend is currently generating about 0.23 per unit of volatility. If you would invest  1,630  in Middlefield Global Dividend on April 25, 2025 and sell it today you would earn a total of  159.00  from holding Middlefield Global Dividend or generate 9.75% return on investment over 90 days.

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

Middlefield Equity Dividend  vs.  Middlefield Global Dividend

Middlefield Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Middlefield Equity Dividend are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Middlefield Equity may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Middlefield Global

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Middlefield Global Dividend are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Middlefield Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Middlefield Equity and Middlefield Global

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

The idea behind Middlefield Equity Dividend and Middlefield Global Dividend 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.