Correlation Between Capital Properties and Community Bancorp
Can any of the company-specific risk be diversified away by investing in both Capital Properties and Community Bancorp 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 Properties and Community Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Properties and Community Bancorp, you can compare the effects of market volatilities on Capital Properties and Community Bancorp 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 Properties with a short position of Community Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Properties and Community Bancorp.
Diversification Opportunities for Capital Properties and Community Bancorp
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Capital and Community is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Capital Properties and Community Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Bancorp and Capital Properties 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 Properties are associated (or correlated) with Community Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Bancorp has no effect on the direction of Capital Properties i.e., Capital Properties and Community Bancorp go up and down completely randomly.
Pair Corralation between Capital Properties and Community Bancorp
Given the investment horizon of 90 days Capital Properties is expected to generate 1.49 times more return on investment than Community Bancorp. However, Capital Properties is 1.49 times more volatile than Community Bancorp. It trades about 0.22 of its potential returns per unit of risk. Community Bancorp is currently generating about 0.0 per unit of risk. If you would invest 1,133 in Capital Properties on August 28, 2024 and sell it today you would earn a total of 134.00 from holding Capital Properties or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.97% |
| Values | Daily Returns |
Capital Properties vs. Community Bancorp
Performance |
| Timeline |
| Capital Properties |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Community Bancorp |
Capital Properties and Community Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Properties and Community Bancorp
The main advantage of trading using opposite Capital Properties and Community Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Properties position performs unexpectedly, Community Bancorp 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 Community Bancorp will offset losses from the drop in Community Bancorp's long position.| Capital Properties vs. Community Bancorp | Capital Properties vs. F M Bank | Capital Properties vs. ENB Financial Corp | Capital Properties vs. CreditRiskMonitorCom |
| Community Bancorp vs. Eastern Michigan Financial | Community Bancorp vs. Commercial National Financial | Community Bancorp vs. Mifflinburg Bancorp | Community Bancorp vs. Apollo Bancorp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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