Correlation Between Capitol Series and IM Global

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

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

Diversification Opportunities for Capitol Series and IM Global

0.3

Correlation Coefficient

Capitol Series  IM Global

Weak diversification

The 3 months correlation between Capitol and IRBA is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Capitol Series Trust and IM Global Partner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IM Global Partner and Capitol 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 Capitol Series Trust are associated (or correlated) with IM Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IM Global Partner has no effect on the direction of Capitol Series i.e., Capitol Series and IM Global go up and down completely randomly.

Pair Corralation between Capitol Series and IM Global

If you would invest  2,679  in Capitol Series Trust on September 15, 2024 and sell it today you would earn a total of  369.00  from holding Capitol Series Trust or generate 13.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Capitol Series Trust  vs.  IM Global Partner

Capitol Series Trust

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Capitol Series Trust are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Capitol Series exhibited solid returns over the last few months and may actually be approaching a breakup point.

IM Global Partner

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IM Global Partner has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, IM Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Capitol Series and IM Global

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

The idea behind Capitol Series Trust and IM Global Partner 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.