Correlation Between Barclays ETN and Capitol Series

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

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

Diversification Opportunities for Barclays ETN and Capitol Series

0.93

Correlation Coefficient

Barclays ETN  Capitol Series

Almost no diversification

The 3 months correlation between Barclays and Capitol is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select 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 Barclays ETN 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 Barclays ETN Select 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 Barclays ETN i.e., Barclays ETN and Capitol Series go up and down completely randomly.

Pair Corralation between Barclays ETN and Capitol Series

Given the investment horizon of 90 days Barclays ETN Select is expected to generate 1.63 times more return on investment than Capitol Series. However, Barclays ETN is 1.63 times more volatile than Capitol Series Trust. It trades about 0.18 of its potential returns per unit of risk. Capitol Series Trust is currently generating about 0.22 per unit of risk. If you would invest  2,579  in Barclays ETN Select on September 18, 2024 and sell it today you would earn a total of  300.00  from holding Barclays ETN Select or generate 11.63% return on investment over 90 days.

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

Barclays ETN Select  vs.  Capitol Series Trust

Barclays ETN Select

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Barclays ETN Select are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak primary indicators, Barclays ETN may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Capitol Series Trust

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Capitol Series Trust are ranked lower than 17 (%) 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 Barclays ETN and Capitol Series

The main advantage of trading using opposite Barclays ETN and Capitol Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN 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 Barclays ETN Select 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.