Correlation Between Associated Capital and SRH Total
Can any of the company-specific risk be diversified away by investing in both Associated Capital and SRH Total 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 SRH Total 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 SRH Total Return, you can compare the effects of market volatilities on Associated Capital and SRH Total 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 SRH Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and SRH Total.
Diversification Opportunities for Associated Capital and SRH Total
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and SRH is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and SRH Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SRH Total Return 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 SRH Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SRH Total Return has no effect on the direction of Associated Capital i.e., Associated Capital and SRH Total go up and down completely randomly.
Pair Corralation between Associated Capital and SRH Total
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 3.41 times less return on investment than SRH Total. In addition to that, Associated Capital is 1.81 times more volatile than SRH Total Return. It trades about 0.02 of its total potential returns per unit of risk. SRH Total Return is currently generating about 0.11 per unit of volatility. If you would invest 1,228 in SRH Total Return on August 31, 2024 and sell it today you would earn a total of 445.00 from holding SRH Total Return or generate 36.24% 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. SRH Total Return
Performance |
| Timeline |
| Associated Capital |
| SRH Total Return |
Associated Capital and SRH Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and SRH Total
The main advantage of trading using opposite Associated Capital and SRH Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, SRH Total 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 SRH Total will offset losses from the drop in SRH Total'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 |
| SRH Total vs. Blackrock Floating Rate | SRH Total vs. Eaton Vance Senior | SRH Total vs. Eaton Vance Senior | SRH Total vs. Blackrock Debt Strategies |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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