Correlation Between Associated Capital and Mill City

Can any of the company-specific risk be diversified away by investing in both Associated Capital and Mill City 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 Mill City 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 Mill City Ventures, you can compare the effects of market volatilities on Associated Capital and Mill City 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 Mill City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Mill City.

Diversification Opportunities for Associated Capital and Mill City

-0.27

Correlation Coefficient

Associated Capital  Mill City

Very good diversification

The 3 months correlation between Associated and Mill is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Mill City Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mill City Ventures 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 Mill City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mill City Ventures has no effect on the direction of Associated Capital i.e., Associated Capital and Mill City go up and down completely randomly.

Pair Corralation between Associated Capital and Mill City

Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 0.22 times more return on investment than Mill City. However, Associated Capital Group is 4.56 times less risky than Mill City. It trades about 0.08 of its potential returns per unit of risk. Mill City Ventures is currently generating about 0.0 per unit of risk. If you would invest  3,536  in Associated Capital Group on December 29, 2024 and sell it today you would earn a total of  295.00  from holding Associated Capital Group or generate 8.34% return on investment over 90 days.

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

Associated Capital Group  vs.  Mill City Ventures

Associated Capital

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Capital Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Associated Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Mill City Ventures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mill City Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mill City is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Associated Capital and Mill City

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

The idea behind Associated Capital Group and Mill City Ventures 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.