Correlation Between Swan Hedged and Capitol Series
Can any of the company-specific risk be diversified away by investing in both Swan Hedged and Capitol Series 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 Swan Hedged and Capitol Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swan Hedged Equity and Capitol Series Trust, you can compare the effects of market volatilities on Swan Hedged and Capitol Series 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 Swan Hedged with a short position of Capitol Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swan Hedged and Capitol Series.
Diversification Opportunities for Swan Hedged and Capitol Series
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Swan and Capitol is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Swan Hedged Equity and Capitol Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitol Series Trust and Swan Hedged 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 Swan Hedged Equity are associated (or correlated) with Capitol Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitol Series Trust has no effect on the direction of Swan Hedged i.e., Swan Hedged and Capitol Series go up and down completely randomly.
Pair Corralation between Swan Hedged and Capitol Series
Given the investment horizon of 90 days Swan Hedged is expected to generate 1.57 times less return on investment than Capitol Series. But when comparing it to its historical volatility, Swan Hedged Equity is 1.39 times less risky than Capitol Series. It trades about 0.34 of its potential returns per unit of risk. Capitol Series Trust is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 4,370 in Capitol Series Trust on September 1, 2024 and sell it today you would earn a total of 264.00 from holding Capitol Series Trust or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swan Hedged Equity vs. Capitol Series Trust
Performance |
| Timeline |
| Swan Hedged Equity |
| Capitol Series Trust |
Swan Hedged and Capitol Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swan Hedged and Capitol Series
The main advantage of trading using opposite Swan Hedged and Capitol Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swan Hedged position performs unexpectedly, Capitol Series 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 Capitol Series will offset losses from the drop in Capitol Series' long position.| Swan Hedged vs. Core Alternative ETF | Swan Hedged vs. Invesco SP 500 | Swan Hedged vs. ETF Series Solutions | Swan Hedged vs. WisdomTree Target Range |
| Capitol Series vs. First Trust LongShort | Capitol Series vs. Cambria Global Momentum | Capitol Series vs. Cambria Global Asset | Capitol Series vs. ProShares Hedge Replication |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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