Correlation Between 159681 and First Capital

Can any of the company-specific risk be diversified away by investing in both 159681 and First Capital 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 159681 and First Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 159681 and First Capital Securities, you can compare the effects of market volatilities on 159681 and First Capital 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 159681 with a short position of First Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159681 and First Capital.

Diversification Opportunities for 159681 and First Capital

0.53

Correlation Coefficient

159681  First Capital

Very weak diversification

The 3 months correlation between 159681 and First is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding 159681 and First Capital Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital Securities and 159681 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 159681 are associated (or correlated) with First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital Securities has no effect on the direction of 159681 i.e., 159681 and First Capital go up and down completely randomly.

Pair Corralation between 159681 and First Capital

Assuming the 90 days trading horizon 159681 is expected to generate 1.31 times less return on investment than First Capital. In addition to that, 159681 is 1.15 times more volatile than First Capital Securities. It trades about 0.15 of its total potential returns per unit of risk. First Capital Securities is currently generating about 0.22 per unit of volatility. If you would invest  524.00  in First Capital Securities on September 23, 2024 and sell it today you would earn a total of  378.00  from holding First Capital Securities or generate 72.14% return on investment over 90 days.

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

159681  vs.  First Capital Securities

159681

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 159681 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 159681 sustained solid returns over the last few months and may actually be approaching a breakup point.

First Capital Securities

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Capital Securities are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, First Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 159681 and First Capital

The main advantage of trading using opposite 159681 and First Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159681 position performs unexpectedly, First Capital 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 First Capital will offset losses from the drop in First Capital's long position.

The idea behind 159681 and First Capital Securities 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.