Correlation Between Hunter Small and Capital Income
Can any of the company-specific risk be diversified away by investing in both Hunter Small and Capital Income 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 Hunter Small and Capital Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hunter Small Cap and Capital Income Builder, you can compare the effects of market volatilities on Hunter Small and Capital Income 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 Hunter Small with a short position of Capital Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunter Small and Capital Income.
Diversification Opportunities for Hunter Small and Capital Income
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hunter and Capital is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hunter Small Cap and Capital Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Income Builder and Hunter Small 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 Hunter Small Cap are associated (or correlated) with Capital Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Income Builder has no effect on the direction of Hunter Small i.e., Hunter Small and Capital Income go up and down completely randomly.
Pair Corralation between Hunter Small and Capital Income
Assuming the 90 days horizon Hunter Small Cap is expected to generate 1.81 times more return on investment than Capital Income. However, Hunter Small is 1.81 times more volatile than Capital Income Builder. It trades about 0.06 of its potential returns per unit of risk. Capital Income Builder is currently generating about 0.08 per unit of risk. If you would invest 1,181 in Hunter Small Cap on November 3, 2024 and sell it today you would earn a total of 93.00 from holding Hunter Small Cap or generate 7.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunter Small Cap vs. Capital Income Builder
Performance |
| Timeline |
| Hunter Small Cap |
| Capital Income Builder |
Hunter Small and Capital Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunter Small and Capital Income
The main advantage of trading using opposite Hunter Small and Capital Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunter Small position performs unexpectedly, Capital Income 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 Income will offset losses from the drop in Capital Income's long position.| Hunter Small vs. Live Oak Health | Hunter Small vs. Blackrock Health Sciences | Hunter Small vs. Blackrock Health Sciences | Hunter Small vs. Tekla Healthcare Investors |
| Capital Income vs. Fidelity Large Cap | Capital Income vs. Guidemark Large Cap | Capital Income vs. Smead Value Fund | Capital Income vs. Oakmark Fund Investor |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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