Correlation Between BZDYF and Capitol Series

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

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

Diversification Opportunities for BZDYF and Capitol Series

0.88

Correlation Coefficient

BZDYF  Capitol Series

Very poor diversification

The 3 months correlation between BZDYF and Capitol is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding BZDYF 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 BZDYF 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 BZDYF 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 BZDYF i.e., BZDYF and Capitol Series go up and down completely randomly.

Pair Corralation between BZDYF and Capitol Series

Assuming the 90 days horizon BZDYF is expected to generate 3.67 times less return on investment than Capitol Series. But when comparing it to its historical volatility, BZDYF is 1.82 times less risky than Capitol Series. It trades about 0.08 of its potential returns per unit of risk. Capitol Series Trust is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,316  in Capitol Series Trust on September 17, 2024 and sell it today you would earn a total of  1,739  from holding Capitol Series Trust or generate 132.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	80.24%
Values	Daily Returns

BZDYF  vs.  Capitol Series Trust

BZDYF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BZDYF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BZDYF is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Capitol Series Trust

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Capitol Series Trust are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Capitol Series exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BZDYF and Capitol Series

The main advantage of trading using opposite BZDYF and Capitol Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BZDYF 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 BZDYF 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.