Correlation Between Capital Group and Ocean Park
Can any of the company-specific risk be diversified away by investing in both Capital Group and Ocean Park 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 Capital Group and Ocean Park into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Group Core and Ocean Park International, you can compare the effects of market volatilities on Capital Group and Ocean Park 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 Capital Group with a short position of Ocean Park. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Group and Ocean Park.
Diversification Opportunities for Capital Group and Ocean Park
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capital and Ocean is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Capital Group Core and Ocean Park International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Park International and Capital Group 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 Capital Group Core are associated (or correlated) with Ocean Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Park International has no effect on the direction of Capital Group i.e., Capital Group and Ocean Park go up and down completely randomly.
Pair Corralation between Capital Group and Ocean Park
Given the investment horizon of 90 days Capital Group Core is expected to generate 0.85 times more return on investment than Ocean Park. However, Capital Group Core is 1.18 times less risky than Ocean Park. It trades about 0.04 of its potential returns per unit of risk. Ocean Park International is currently generating about -0.08 per unit of risk. If you would invest 2,761 in Capital Group Core on January 12, 2025 and sell it today you would earn a total of 240.00 from holding Capital Group Core or generate 8.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 76.71% |
| Values | Daily Returns |
Capital Group Core vs. Ocean Park International
Performance |
| Timeline |
| Capital Group Core |
| Ocean Park International |
Capital Group and Ocean Park Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Group and Ocean Park
The main advantage of trading using opposite Capital Group and Ocean Park positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Group position performs unexpectedly, Ocean Park 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 Ocean Park will offset losses from the drop in Ocean Park's long position.| Capital Group vs. Strategy Shares | Capital Group vs. Freedom Day Dividend | Capital Group vs. Franklin Templeton ETF | Capital Group vs. iShares MSCI China |
| Ocean Park vs. MFUT | Ocean Park vs. The Advisors Inner | Ocean Park vs. The Advisors Inner | Ocean Park vs. The Advisors Inner |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |