Correlation Between Capital Point and Overseas Commerce
Can any of the company-specific risk be diversified away by investing in both Capital Point and Overseas Commerce 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 Capital Point and Overseas Commerce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Point and Overseas Commerce, you can compare the effects of market volatilities on Capital Point and Overseas Commerce 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 Capital Point with a short position of Overseas Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Point and Overseas Commerce.
Diversification Opportunities for Capital Point and Overseas Commerce
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capital and Overseas is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Capital Point and Overseas Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overseas Commerce and Capital Point 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 Capital Point are associated (or correlated) with Overseas Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overseas Commerce has no effect on the direction of Capital Point i.e., Capital Point and Overseas Commerce go up and down completely randomly.
Pair Corralation between Capital Point and Overseas Commerce
Assuming the 90 days trading horizon Capital Point is expected to generate 1.05 times more return on investment than Overseas Commerce. However, Capital Point is 1.05 times more volatile than Overseas Commerce. It trades about 0.25 of its potential returns per unit of risk. Overseas Commerce is currently generating about 0.13 per unit of risk. If you would invest 4,960 in Capital Point on September 25, 2024 and sell it today you would earn a total of 1,140 from holding Capital Point or generate 22.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Capital Point vs. Overseas Commerce
Performance |
Timeline |
Capital Point |
Overseas Commerce |
Capital Point and Overseas Commerce Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Capital Point and Overseas Commerce
The main advantage of trading using opposite Capital Point and Overseas Commerce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Point position performs unexpectedly, Overseas Commerce 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 Overseas Commerce will offset losses from the drop in Overseas Commerce's long position.Capital Point vs. Harel Insurance Investments | Capital Point vs. Clal Insurance Enterprises | Capital Point vs. Bank Hapoalim | Capital Point vs. Bank Leumi Le Israel |
Overseas Commerce vs. Fridenson | Overseas Commerce vs. Capital Point | Overseas Commerce vs. Gilat Telecom Global | Overseas Commerce vs. Reit 1 |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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