Correlation Between Capital One and Silvercrest Asset
Can any of the company-specific risk be diversified away by investing in both Capital One and Silvercrest Asset 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 One and Silvercrest Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital One Financial and Silvercrest Asset Management, you can compare the effects of market volatilities on Capital One and Silvercrest Asset 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 One with a short position of Silvercrest Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital One and Silvercrest Asset.
Diversification Opportunities for Capital One and Silvercrest Asset
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Capital and Silvercrest is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Capital One Financial and Silvercrest Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercrest Asset and Capital One 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 One Financial are associated (or correlated) with Silvercrest Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercrest Asset has no effect on the direction of Capital One i.e., Capital One and Silvercrest Asset go up and down completely randomly.
Pair Corralation between Capital One and Silvercrest Asset
Considering the 90-day investment horizon Capital One Financial is expected to generate 0.89 times more return on investment than Silvercrest Asset. However, Capital One Financial is 1.12 times less risky than Silvercrest Asset. It trades about 0.06 of its potential returns per unit of risk. Silvercrest Asset Management is currently generating about 0.02 per unit of risk. If you would invest 11,057 in Capital One Financial on September 19, 2024 and sell it today you would earn a total of 7,061 from holding Capital One Financial or generate 63.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital One Financial vs. Silvercrest Asset Management
Performance |
| Timeline |
| Capital One Financial |
| Silvercrest Asset |
Capital One and Silvercrest Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital One and Silvercrest Asset
The main advantage of trading using opposite Capital One and Silvercrest Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital One position performs unexpectedly, Silvercrest Asset 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 Silvercrest Asset will offset losses from the drop in Silvercrest Asset's long position.The idea behind Capital One Financial and Silvercrest Asset Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Silvercrest Asset vs. Brightsphere Investment Group | Silvercrest Asset vs. DWS Municipal Income | Silvercrest Asset vs. Blackrock Muni Intermediate | Silvercrest Asset 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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