Correlation Between Capstone Technologies and Arhaus
Can any of the company-specific risk be diversified away by investing in both Capstone Technologies and Arhaus 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 Capstone Technologies and Arhaus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capstone Technologies Group and Arhaus Inc, you can compare the effects of market volatilities on Capstone Technologies and Arhaus 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 Capstone Technologies with a short position of Arhaus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Technologies and Arhaus.
Diversification Opportunities for Capstone Technologies and Arhaus
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Capstone and Arhaus is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Technologies Group and Arhaus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arhaus Inc and Capstone Technologies 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 Capstone Technologies Group are associated (or correlated) with Arhaus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arhaus Inc has no effect on the direction of Capstone Technologies i.e., Capstone Technologies and Arhaus go up and down completely randomly.
Pair Corralation between Capstone Technologies and Arhaus
Given the investment horizon of 90 days Capstone Technologies is expected to generate 4.9 times less return on investment than Arhaus. But when comparing it to its historical volatility, Capstone Technologies Group is 5.45 times less risky than Arhaus. It trades about 0.22 of its potential returns per unit of risk. Arhaus Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 979.00 in Arhaus Inc on September 12, 2024 and sell it today you would earn a total of 134.00 from holding Arhaus Inc or generate 13.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capstone Technologies Group vs. Arhaus Inc
Performance |
| Timeline |
| Capstone Technologies |
| Arhaus Inc |
Capstone Technologies and Arhaus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Technologies and Arhaus
The main advantage of trading using opposite Capstone Technologies and Arhaus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Technologies position performs unexpectedly, Arhaus 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 Arhaus will offset losses from the drop in Arhaus' long position.| Capstone Technologies vs. Arhaus Inc | Capstone Technologies vs. Floor Decor Holdings | Capstone Technologies vs. Live Ventures | Capstone Technologies vs. ATT Inc |
| Arhaus vs. Victory Integrity Smallmid Cap | Arhaus vs. Hilton Worldwide Holdings | Arhaus vs. NVIDIA | Arhaus vs. JPMorgan Chase Co |
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 CEOs Directory module to screen CEOs from public companies around the world.
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