Correlation Between Alpine Banks and Cgrowth Capital

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

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

Diversification Opportunities for Alpine Banks and Cgrowth Capital

0.53

Correlation Coefficient

Alpine Banks  Cgrowth Capital

Very weak diversification

The 3 months correlation between Alpine and Cgrowth is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Alpine Banks of and Cgrowth Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cgrowth Capital and Alpine Banks 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 Alpine Banks of are associated (or correlated) with Cgrowth Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cgrowth Capital has no effect on the direction of Alpine Banks i.e., Alpine Banks and Cgrowth Capital go up and down completely randomly.

Pair Corralation between Alpine Banks and Cgrowth Capital

Assuming the 90 days horizon Alpine Banks is expected to generate 26.82 times less return on investment than Cgrowth Capital. But when comparing it to its historical volatility, Alpine Banks of is 15.86 times less risky than Cgrowth Capital. It trades about 0.02 of its potential returns per unit of risk. Cgrowth Capital is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Cgrowth Capital on September 26, 2024 and sell it today you would lose (1.70) from holding Cgrowth Capital or give up 85.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Alpine Banks of  vs.  Cgrowth Capital

Alpine Banks

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alpine Banks of are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady forward indicators, Alpine Banks sustained solid returns over the last few months and may actually be approaching a breakup point.

Cgrowth Capital

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cgrowth Capital are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Cgrowth Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpine Banks and Cgrowth Capital

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

The idea behind Alpine Banks of and Cgrowth Capital 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.