Correlation Between Aptus Drawdown and Capitol Series

Can any of the company-specific risk be diversified away by investing in both Aptus Drawdown and Capitol Series 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 Aptus Drawdown and Capitol Series into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aptus Drawdown Managed and Capitol Series Trust, you can compare the effects of market volatilities on Aptus Drawdown and Capitol Series 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 Aptus Drawdown with a short position of Capitol Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Drawdown and Capitol Series.

Diversification Opportunities for Aptus Drawdown and Capitol Series

0.98

Correlation Coefficient

Aptus Drawdown  Capitol Series

Almost no diversification

The 3 months correlation between Aptus and Capitol is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Drawdown Managed and Capitol Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitol Series Trust and Aptus Drawdown 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 Aptus Drawdown Managed are associated (or correlated) with Capitol Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitol Series Trust has no effect on the direction of Aptus Drawdown i.e., Aptus Drawdown and Capitol Series go up and down completely randomly.

Pair Corralation between Aptus Drawdown and Capitol Series

Given the investment horizon of 90 days Aptus Drawdown is expected to generate 1.31 times less return on investment than Capitol Series. But when comparing it to its historical volatility, Aptus Drawdown Managed is 1.01 times less risky than Capitol Series. It trades about 0.16 of its potential returns per unit of risk. Capitol Series Trust is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  4,301  in Capitol Series Trust on September 17, 2024 and sell it today you would earn a total of  354.00  from holding Capitol Series Trust or generate 8.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.46%
Values	Daily Returns

Aptus Drawdown Managed  vs.  Capitol Series Trust

Aptus Drawdown Managed

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aptus Drawdown Managed are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Aptus Drawdown is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Capitol Series Trust

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Capitol Series Trust are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Capitol Series may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aptus Drawdown and Capitol Series

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

The idea behind Aptus Drawdown Managed and Capitol Series Trust 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.