Correlation Between Associated Capital and Noah Holdings
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Noah Holdings 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 Noah Holdings 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 Noah Holdings, you can compare the effects of market volatilities on Associated Capital and Noah Holdings 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 Noah Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Noah Holdings.
Diversification Opportunities for Associated Capital and Noah Holdings
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and Noah is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Noah Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noah Holdings 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 Noah Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noah Holdings has no effect on the direction of Associated Capital i.e., Associated Capital and Noah Holdings go up and down completely randomly.
Pair Corralation between Associated Capital and Noah Holdings
Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 0.42 times more return on investment than Noah Holdings. However, Associated Capital Group is 2.36 times less risky than Noah Holdings. It trades about 0.02 of its potential returns per unit of risk. Noah Holdings is currently generating about -0.01 per unit of risk. If you would invest 3,609 in Associated Capital Group on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Associated Capital Group or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Noah Holdings
Performance |
| Timeline |
| Associated Capital |
| Noah Holdings |
Associated Capital and Noah Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Noah Holdings
The main advantage of trading using opposite Associated Capital and Noah Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Noah Holdings 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 Noah Holdings will offset losses from the drop in Noah Holdings' long position.| Associated Capital vs. TPG Inc | Associated Capital vs. Carlyle Secured Lending | Associated Capital vs. Brookfield Corp |
| Noah Holdings vs. MFS Investment Grade | Noah Holdings vs. Invesco High Income | Noah Holdings vs. Eaton Vance National | Noah Holdings vs. Nuveen California Select |
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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