Correlation Between Alpha Trust and CNL Capital

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

By analyzing existing cross correlation between Alpha Trust Andromeda and CNL Capital EKES AIFM, you can compare the effects of market volatilities on Alpha Trust and CNL 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 Alpha Trust with a short position of CNL Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Trust and CNL Capital.

Diversification Opportunities for Alpha Trust and CNL Capital

-0.53

Correlation Coefficient

Alpha Trust  CNL Capital

Excellent diversification

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

Pair Corralation between Alpha Trust and CNL Capital

Assuming the 90 days trading horizon Alpha Trust Andromeda is expected to generate 0.91 times more return on investment than CNL Capital. However, Alpha Trust Andromeda is 1.1 times less risky than CNL Capital. It trades about 0.13 of its potential returns per unit of risk. CNL Capital EKES AIFM is currently generating about -0.06 per unit of risk. If you would invest  636.00  in Alpha Trust Andromeda on December 30, 2024 and sell it today you would earn a total of  36.00  from holding Alpha Trust Andromeda or generate 5.66% return on investment over 90 days.

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

Alpha Trust Andromeda  vs.  CNL Capital EKES AIFM

Alpha Trust Andromeda

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Trust Andromeda are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Alpha Trust is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

CNL Capital EKES

Risk-Adjusted Performance

Very Weak

Over the last 90 days CNL Capital EKES AIFM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, CNL Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alpha Trust and CNL Capital

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

The idea behind Alpha Trust Andromeda and CNL Capital EKES AIFM 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.