Correlation Between Capital Futures and IBF Financial
Can any of the company-specific risk be diversified away by investing in both Capital Futures and IBF Financial 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 Capital Futures and IBF Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Futures Corp and IBF Financial Holdings, you can compare the effects of market volatilities on Capital Futures and IBF Financial 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 Futures with a short position of IBF Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Futures and IBF Financial.
Diversification Opportunities for Capital Futures and IBF Financial
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capital and IBF is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Capital Futures Corp and IBF Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBF Financial Holdings and Capital Futures 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 Futures Corp are associated (or correlated) with IBF Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBF Financial Holdings has no effect on the direction of Capital Futures i.e., Capital Futures and IBF Financial go up and down completely randomly.
Pair Corralation between Capital Futures and IBF Financial
Assuming the 90 days trading horizon Capital Futures Corp is expected to generate 1.14 times more return on investment than IBF Financial. However, Capital Futures is 1.14 times more volatile than IBF Financial Holdings. It trades about 0.08 of its potential returns per unit of risk. IBF Financial Holdings is currently generating about -0.02 per unit of risk. If you would invest 5,720 in Capital Futures Corp on September 4, 2024 and sell it today you would earn a total of 120.00 from holding Capital Futures Corp or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Futures Corp vs. IBF Financial Holdings
Performance |
| Timeline |
| Capital Futures Corp |
| IBF Financial Holdings |
Capital Futures and IBF Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Futures and IBF Financial
The main advantage of trading using opposite Capital Futures and IBF Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Futures position performs unexpectedly, IBF Financial 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 IBF Financial will offset losses from the drop in IBF Financial's long position.| Capital Futures vs. IBF Financial Holdings | Capital Futures vs. Capital Securities Corp | Capital Futures vs. President Securities Corp | Capital Futures vs. China Bills Finance |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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