Correlation Between SHF Holdings and Netcapital
Can any of the company-specific risk be diversified away by investing in both SHF Holdings and Netcapital 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 SHF Holdings and Netcapital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHF Holdings and Netcapital, you can compare the effects of market volatilities on SHF Holdings and Netcapital 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 SHF Holdings with a short position of Netcapital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHF Holdings and Netcapital.
Diversification Opportunities for SHF Holdings and Netcapital
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SHF and Netcapital is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding SHF Holdings and Netcapital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netcapital and SHF Holdings 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 SHF Holdings are associated (or correlated) with Netcapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netcapital has no effect on the direction of SHF Holdings i.e., SHF Holdings and Netcapital go up and down completely randomly.
Pair Corralation between SHF Holdings and Netcapital
Assuming the 90 days horizon SHF Holdings is expected to under-perform the Netcapital. But the stock apears to be less risky and, when comparing its historical volatility, SHF Holdings is 1.87 times less risky than Netcapital. The stock trades about -0.08 of its potential returns per unit of risk. The Netcapital is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.99 in Netcapital on September 2, 2024 and sell it today you would earn a total of 0.01 from holding Netcapital or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 55.56% |
| Values | Daily Returns |
SHF Holdings vs. Netcapital
Performance |
| Timeline |
| SHF Holdings |
| Netcapital |
SHF Holdings and Netcapital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHF Holdings and Netcapital
The main advantage of trading using opposite SHF Holdings and Netcapital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHF Holdings position performs unexpectedly, Netcapital 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 Netcapital will offset losses from the drop in Netcapital's long position.| SHF Holdings vs. Affinity Bancshares | SHF Holdings vs. Auburn National Bancorporation | SHF Holdings vs. First Community | SHF Holdings vs. LINKBANCORP |
| Netcapital vs. Netcapital | Netcapital vs. BuzzFeed | Netcapital vs. Guardforce AI Co | Netcapital vs. SHF Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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