Correlation Between Concord Securities and Capital Futures

Can any of the company-specific risk be diversified away by investing in both Concord Securities and Capital Futures 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 Concord Securities and Capital Futures into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Concord Securities Co and Capital Futures Corp, you can compare the effects of market volatilities on Concord Securities and Capital Futures 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 Concord Securities with a short position of Capital Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Securities and Capital Futures.

Diversification Opportunities for Concord Securities and Capital Futures

-0.33

Correlation Coefficient

Concord Securities  Capital Futures

Very good diversification

The 3 months correlation between Concord and Capital is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Concord Securities Co and Capital Futures Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Futures Corp and Concord Securities 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 Concord Securities Co are associated (or correlated) with Capital Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Futures Corp has no effect on the direction of Concord Securities i.e., Concord Securities and Capital Futures go up and down completely randomly.

Pair Corralation between Concord Securities and Capital Futures

Assuming the 90 days trading horizon Concord Securities Co is expected to under-perform the Capital Futures. But the stock apears to be less risky and, when comparing its historical volatility, Concord Securities Co is 1.42 times less risky than Capital Futures. The stock trades about -0.11 of its potential returns per unit of risk. The Capital Futures Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  5,620  in Capital Futures Corp on September 18, 2024 and sell it today you would earn a total of  200.00  from holding Capital Futures Corp or generate 3.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Concord Securities Co  vs.  Capital Futures Corp

Concord Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concord Securities Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Concord Securities is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Capital Futures Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Futures Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Capital Futures is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Concord Securities and Capital Futures

The main advantage of trading using opposite Concord Securities and Capital Futures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Securities position performs unexpectedly, Capital Futures 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 Futures will offset losses from the drop in Capital Futures' long position.

The idea behind Concord Securities Co and Capital Futures Corp 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.