Correlation Between Associated Capital and Strats SM
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Strats SM 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 Associated Capital and Strats SM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Strats SM Trust, you can compare the effects of market volatilities on Associated Capital and Strats SM 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 Associated Capital with a short position of Strats SM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Strats SM.
Diversification Opportunities for Associated Capital and Strats SM
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Associated and Strats is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Strats SM Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strats SM Trust and Associated Capital 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 Associated Capital Group are associated (or correlated) with Strats SM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strats SM Trust has no effect on the direction of Associated Capital i.e., Associated Capital and Strats SM go up and down completely randomly.
Pair Corralation between Associated Capital and Strats SM
Allowing for the 90-day total investment horizon Associated Capital Group is expected to under-perform the Strats SM. In addition to that, Associated Capital is 5.04 times more volatile than Strats SM Trust. It trades about -0.05 of its total potential returns per unit of risk. Strats SM Trust is currently generating about 0.08 per unit of volatility. If you would invest 2,484 in Strats SM Trust on October 25, 2024 and sell it today you would earn a total of 12.00 from holding Strats SM Trust or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Strats SM Trust
Performance |
| Timeline |
| Associated Capital |
| Strats SM Trust |
Associated Capital and Strats SM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Strats SM
The main advantage of trading using opposite Associated Capital and Strats SM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Strats SM 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 Strats SM will offset losses from the drop in Strats SM's long position.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
| Strats SM vs. STRATS SM Trust | Strats SM vs. STRATS SM Trust | Strats SM vs. Strats SM Trust | Strats SM vs. STRATSSM Certificates series |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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