Correlation Between Capital Futures and Concord Securities
Can any of the company-specific risk be diversified away by investing in both Capital Futures and Concord Securities 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 Concord Securities 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 Concord Securities Co, you can compare the effects of market volatilities on Capital Futures and Concord Securities 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 Concord Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Futures and Concord Securities.
Diversification Opportunities for Capital Futures and Concord Securities
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capital and Concord is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Capital Futures Corp and Concord Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Securities 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 Concord Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Securities has no effect on the direction of Capital Futures i.e., Capital Futures and Concord Securities go up and down completely randomly.
Pair Corralation between Capital Futures and Concord Securities
Assuming the 90 days trading horizon Capital Futures Corp is expected to generate 0.54 times more return on investment than Concord Securities. However, Capital Futures Corp is 1.86 times less risky than Concord Securities. It trades about 0.06 of its potential returns per unit of risk. Concord Securities Co is currently generating about 0.03 per unit of risk. If you would invest 4,945 in Capital Futures Corp on September 14, 2024 and sell it today you would earn a total of 945.00 from holding Capital Futures Corp or generate 19.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Futures Corp vs. Concord Securities Co
Performance |
| Timeline |
| Capital Futures Corp |
| Concord Securities |
Capital Futures and Concord Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Futures and Concord Securities
The main advantage of trading using opposite Capital Futures and Concord Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Futures position performs unexpectedly, Concord Securities 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 Concord Securities will offset losses from the drop in Concord Securities' 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 |
| Concord Securities vs. Voltronic Power Technology | Concord Securities vs. Asmedia Technology | Concord Securities vs. Thermaltake Technology Co | Concord Securities vs. Asia Metal Industries |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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