Correlation Between 1812 Brewing and Capital Venture

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Can any of the company-specific risk be diversified away by investing in both 1812 Brewing and Capital Venture 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 1812 Brewing and Capital Venture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1812 Brewing and Capital Venture Europe, you can compare the effects of market volatilities on 1812 Brewing and Capital Venture 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 1812 Brewing with a short position of Capital Venture. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1812 Brewing and Capital Venture.

Diversification Opportunities for 1812 Brewing and Capital Venture

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between 1812 and Capital is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 1812 Brewing and Capital Venture Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Venture Europe and 1812 Brewing 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 1812 Brewing are associated (or correlated) with Capital Venture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Venture Europe has no effect on the direction of 1812 Brewing i.e., 1812 Brewing and Capital Venture go up and down completely randomly.

Pair Corralation between 1812 Brewing and Capital Venture

Given the investment horizon of 90 days 1812 Brewing is expected to generate 1071.43 times more return on investment than Capital Venture. However, 1812 Brewing is 1071.43 times more volatile than Capital Venture Europe. It trades about 0.23 of its potential returns per unit of risk. Capital Venture Europe is currently generating about -0.05 per unit of risk. If you would invest  0.04  in 1812 Brewing on September 20, 2024 and sell it today you would lose (0.03) from holding 1812 Brewing or give up 75.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy87.07%
ValuesDaily Returns

1812 Brewing  vs.  Capital Venture Europe

 Performance 
       Timeline  
1812 Brewing 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in 1812 Brewing are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent technical and fundamental indicators, 1812 Brewing unveiled solid returns over the last few months and may actually be approaching a breakup point.
Capital Venture Europe 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Capital Venture Europe has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Capital Venture is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

1812 Brewing and Capital Venture Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 1812 Brewing and Capital Venture

The main advantage of trading using opposite 1812 Brewing and Capital Venture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1812 Brewing position performs unexpectedly, Capital Venture 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 Venture will offset losses from the drop in Capital Venture's long position.
The idea behind 1812 Brewing and Capital Venture Europe 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.
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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