Correlation Between Evoqua Water and Capitol Series

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

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

Diversification Opportunities for Evoqua Water and Capitol Series

0.46

Correlation Coefficient

Evoqua Water  Capitol Series

Very weak diversification

The 3 months correlation between Evoqua and Capitol is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Evoqua Water Technologies and Capitol Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitol Series Trust and Evoqua Water 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 Evoqua Water Technologies are associated (or correlated) with Capitol Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitol Series Trust has no effect on the direction of Evoqua Water i.e., Evoqua Water and Capitol Series go up and down completely randomly.

Pair Corralation between Evoqua Water and Capitol Series

If you would invest  4,988  in Evoqua Water Technologies on January 25, 2024 and sell it today you would earn a total of  0.00  from holding Evoqua Water Technologies or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Evoqua Water Technologies  vs.  Capitol Series Trust

Evoqua Water Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evoqua Water Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Evoqua Water is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Capitol Series Trust

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capitol Series Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Capitol Series is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Evoqua Water and Capitol Series

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

The idea behind Evoqua Water Technologies and Capitol Series Trust 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.