Correlation Between Frp Holdings and Capital Properties

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

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

Diversification Opportunities for Frp Holdings and Capital Properties

0.59

Correlation Coefficient

Frp Holdings  Capital Properties

Very weak diversification

The 3 months correlation between Frp and Capital is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Frp Holdings Ord and Capital Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Properties and Frp Holdings 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 Frp Holdings Ord are associated (or correlated) with Capital Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Properties has no effect on the direction of Frp Holdings i.e., Frp Holdings and Capital Properties go up and down completely randomly.

Pair Corralation between Frp Holdings and Capital Properties

Given the investment horizon of 90 days Frp Holdings is expected to generate 3.28 times less return on investment than Capital Properties. But when comparing it to its historical volatility, Frp Holdings Ord is 1.26 times less risky than Capital Properties. It trades about 0.02 of its potential returns per unit of risk. Capital Properties is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,123  in Capital Properties on September 3, 2024 and sell it today you would earn a total of  144.00  from holding Capital Properties or generate 12.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	30.91%
Values	Daily Returns

Frp Holdings Ord  vs.  Capital Properties

Frp Holdings Ord

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Frp Holdings Ord are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Frp Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Capital Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Capital Properties is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Frp Holdings and Capital Properties

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

The idea behind Frp Holdings Ord and Capital Properties 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.