Correlation Between Financiera Independencia and Capital One
Can any of the company-specific risk be diversified away by investing in both Financiera Independencia and Capital One 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 Financiera Independencia and Capital One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financiera Independencia SAB and Capital One Financial, you can compare the effects of market volatilities on Financiera Independencia and Capital One 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 Financiera Independencia with a short position of Capital One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financiera Independencia and Capital One.
Diversification Opportunities for Financiera Independencia and Capital One
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Financiera and Capital is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Financiera Independencia SAB and Capital One Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital One Financial and Financiera Independencia 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 Financiera Independencia SAB are associated (or correlated) with Capital One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital One Financial has no effect on the direction of Financiera Independencia i.e., Financiera Independencia and Capital One go up and down completely randomly.
Pair Corralation between Financiera Independencia and Capital One
Assuming the 90 days trading horizon Financiera Independencia SAB is expected to under-perform the Capital One. But the stock apears to be less risky and, when comparing its historical volatility, Financiera Independencia SAB is 1.42 times less risky than Capital One. The stock trades about -0.27 of its potential returns per unit of risk. The Capital One Financial is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 336,754 in Capital One Financial on August 31, 2024 and sell it today you would earn a total of 46,232 from holding Capital One Financial or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financiera Independencia SAB vs. Capital One Financial
Performance |
| Timeline |
| Financiera Independencia |
| Capital One Financial |
Financiera Independencia and Capital One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financiera Independencia and Capital One
The main advantage of trading using opposite Financiera Independencia and Capital One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financiera Independencia position performs unexpectedly, Capital One 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 Capital One will offset losses from the drop in Capital One's long position.| Financiera Independencia vs. Taiwan Semiconductor Manufacturing | Financiera Independencia vs. United Airlines Holdings | Financiera Independencia vs. FibraHotel | Financiera Independencia vs. Ross Stores |
| Capital One vs. Applied Materials | Capital One vs. FibraHotel | Capital One vs. Grupo Carso SAB | Capital One vs. Verizon Communications |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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