Correlation Between IShares Ultra and Capitol Series

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Can any of the company-specific risk be diversified away by investing in both IShares Ultra 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 IShares Ultra and Capitol Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares Ultra Short Term and Capitol Series Trust, you can compare the effects of market volatilities on IShares Ultra 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 IShares Ultra with a short position of Capitol Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Ultra and Capitol Series.

Diversification Opportunities for IShares Ultra and Capitol Series

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between IShares and Capitol is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding IShares Ultra Short-Term 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 IShares Ultra 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 IShares Ultra Short Term 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 IShares Ultra i.e., IShares Ultra and Capitol Series go up and down completely randomly.

Pair Corralation between IShares Ultra and Capitol Series

Given the investment horizon of 90 days IShares Ultra is expected to generate 7.63 times less return on investment than Capitol Series. But when comparing it to its historical volatility, IShares Ultra Short Term is 35.4 times less risky than Capitol Series. It trades about 0.95 of its potential returns per unit of risk. Capitol Series Trust is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,820  in Capitol Series Trust on December 29, 2023 and sell it today you would earn a total of  156.00  from holding Capitol Series Trust or generate 4.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

IShares Ultra Short-Term  vs.  Capitol Series Trust

 Performance 
       Timeline  
IShares Ultra Short-Term 

Risk-Adjusted Performance

56 of 100

 
Low
 
High
Market Crasher
Compared to the overall equity markets, risk-adjusted returns on investments in IShares Ultra Short Term are ranked lower than 56 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, IShares Ultra is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.
Capitol Series Trust 

Risk-Adjusted Performance

15 of 100

 
Low
 
High
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 comparatively fragile basic indicators, Capitol Series may actually be approaching a critical reversion point that can send shares even higher in April 2024.

IShares Ultra and Capitol Series Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares Ultra and Capitol Series

The main advantage of trading using opposite IShares Ultra and Capitol Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Ultra 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 IShares Ultra Short Term 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.
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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