Correlation Between Associated Capital and In Veritas

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

By analyzing existing cross correlation between Associated Capital Group and In Veritas Medical, you can compare the effects of market volatilities on Associated Capital and In Veritas 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 Associated Capital with a short position of In Veritas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and In Veritas.

Diversification Opportunities for Associated Capital and In Veritas

0.0

Correlation Coefficient

Associated Capital  In Veritas

Pay attention - limited upside

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

Pair Corralation between Associated Capital and In Veritas

If you would invest  3,498  in Associated Capital Group on December 2, 2024 and sell it today you would earn a total of  228.00  from holding Associated Capital Group or generate 6.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.02%
Values	Daily Returns

Associated Capital Group  vs.  In Veritas Medical

Associated Capital

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Capital Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Associated Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

In Veritas Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days In Veritas Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, In Veritas is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Associated Capital and In Veritas

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

The idea behind Associated Capital Group and In Veritas Medical 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.