Correlation Between Associated Capital and Patria Latin
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Patria Latin 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 Patria Latin 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 Patria Latin American, you can compare the effects of market volatilities on Associated Capital and Patria Latin 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 Patria Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Patria Latin.
Diversification Opportunities for Associated Capital and Patria Latin
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Associated and Patria is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Patria Latin American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patria Latin American 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 Patria Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patria Latin American has no effect on the direction of Associated Capital i.e., Associated Capital and Patria Latin go up and down completely randomly.
Pair Corralation between Associated Capital and Patria Latin
Allowing for the 90-day total investment horizon Associated Capital Group is expected to under-perform the Patria Latin. In addition to that, Associated Capital is 4.64 times more volatile than Patria Latin American. It trades about 0.0 of its total potential returns per unit of risk. Patria Latin American is currently generating about 0.07 per unit of volatility. If you would invest 1,028 in Patria Latin American on August 26, 2024 and sell it today you would earn a total of 135.00 from holding Patria Latin American or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Patria Latin American
Performance |
| Timeline |
| Associated Capital |
| Patria Latin American |
Associated Capital and Patria Latin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Patria Latin
The main advantage of trading using opposite Associated Capital and Patria Latin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Patria Latin 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 Patria Latin will offset losses from the drop in Patria Latin'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 |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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