Correlation Between United States and Associated Capital
Can any of the company-specific risk be diversified away by investing in both United States and Associated 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 United States and Associated Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Oil and Associated Capital Group, you can compare the effects of market volatilities on United States and Associated 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 United States with a short position of Associated Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Associated Capital.
Diversification Opportunities for United States and Associated Capital
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Associated is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding United States Oil and Associated Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Capital and United States 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 United States Oil are associated (or correlated) with Associated Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Capital has no effect on the direction of United States i.e., United States and Associated Capital go up and down completely randomly.
Pair Corralation between United States and Associated Capital
Considering the 90-day investment horizon United States Oil is expected to generate 1.33 times more return on investment than Associated Capital. However, United States is 1.33 times more volatile than Associated Capital Group. It trades about 0.14 of its potential returns per unit of risk. Associated Capital Group is currently generating about 0.15 per unit of risk. If you would invest 7,729 in United States Oil on January 26, 2024 and sell it today you would earn a total of 235.00 from holding United States Oil or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
United States Oil vs. Associated Capital Group
Performance |
| Timeline |
| United States Oil |
| Associated Capital |
United States and Associated Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Associated Capital
The main advantage of trading using opposite United States and Associated Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Associated 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 Associated Capital will offset losses from the drop in Associated Capital's long position.| United States vs. HUMANA INC | United States vs. Aquagold International | United States vs. Barloworld Ltd ADR | United States vs. Morningstar Unconstrained Allocation |
| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. AssetMark Financial Holdings | Associated Capital vs. Blackrock Muni Intermediate |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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