Correlation Between Capital ICE and Capital Tip
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By analyzing existing cross correlation between Capital ICE International15 and Capital Tip Customized, you can compare the effects of market volatilities on Capital ICE and Capital Tip 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 Capital ICE with a short position of Capital Tip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital ICE and Capital Tip.
Diversification Opportunities for Capital ICE and Capital Tip
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and Capital is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Capital ICE International15 and Capital Tip Customized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Tip Customized and Capital ICE 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 Capital ICE International15 are associated (or correlated) with Capital Tip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Tip Customized has no effect on the direction of Capital ICE i.e., Capital ICE and Capital Tip go up and down completely randomly.
Pair Corralation between Capital ICE and Capital Tip
Assuming the 90 days trading horizon Capital ICE is expected to generate 3.91 times less return on investment than Capital Tip. But when comparing it to its historical volatility, Capital ICE International15 is 2.1 times less risky than Capital Tip. It trades about 0.05 of its potential returns per unit of risk. Capital Tip Customized is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,370 in Capital Tip Customized on November 7, 2024 and sell it today you would earn a total of 820.00 from holding Capital Tip Customized or generate 59.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.71% |
| Values | Daily Returns |
Capital ICE International15 vs. Capital Tip Customized
Performance |
| Timeline |
| Capital ICE Internat |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Capital Tip Customized |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Capital ICE and Capital Tip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital ICE and Capital Tip
The main advantage of trading using opposite Capital ICE and Capital Tip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital ICE position performs unexpectedly, Capital Tip 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 Tip will offset losses from the drop in Capital Tip's long position.The idea behind Capital ICE International15 and Capital Tip Customized 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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