Correlation Between Capital Futures and Tachan Securities

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

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

Diversification Opportunities for Capital Futures and Tachan Securities

-0.25

Correlation Coefficient

Capital Futures  Tachan Securities

Very good diversification

The 3 months correlation between Capital and Tachan is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Capital Futures Corp and Tachan Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tachan Securities and Capital Futures 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 Capital Futures Corp are associated (or correlated) with Tachan Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tachan Securities has no effect on the direction of Capital Futures i.e., Capital Futures and Tachan Securities go up and down completely randomly.

Pair Corralation between Capital Futures and Tachan Securities

Assuming the 90 days trading horizon Capital Futures Corp is expected to under-perform the Tachan Securities. In addition to that, Capital Futures is 1.73 times more volatile than Tachan Securities Co. It trades about -0.22 of its total potential returns per unit of risk. Tachan Securities Co is currently generating about 0.08 per unit of volatility. If you would invest  1,830  in Tachan Securities Co on December 30, 2024 and sell it today you would earn a total of  50.00  from holding Tachan Securities Co or generate 2.73% return on investment over 90 days.

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

Capital Futures Corp  vs.  Tachan Securities Co

Capital Futures Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capital Futures Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Tachan Securities

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tachan Securities Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Tachan Securities 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 Capital Futures and Tachan Securities

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

The idea behind Capital Futures Corp and Tachan Securities Co 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..