Correlation Between CAP LEASE and FC Investment

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

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

Diversification Opportunities for CAP LEASE and FC Investment

0.52

Correlation Coefficient

CAP LEASE  FC Investment

Very weak diversification

The 3 months correlation between CAP and FCIT is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust and CAP LEASE 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 CAP LEASE AVIATION are associated (or correlated) with FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of CAP LEASE i.e., CAP LEASE and FC Investment go up and down completely randomly.

Pair Corralation between CAP LEASE and FC Investment

Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to under-perform the FC Investment. In addition to that, CAP LEASE is 3.98 times more volatile than FC Investment Trust. It trades about -0.09 of its total potential returns per unit of risk. FC Investment Trust is currently generating about -0.02 per unit of volatility. If you would invest  110,839  in FC Investment Trust on December 29, 2024 and sell it today you would lose (1,839) from holding FC Investment Trust or give up 1.66% of portfolio value over 90 days.

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

CAP LEASE AVIATION  vs.  FC Investment Trust

CAP LEASE AVIATION

Risk-Adjusted Performance

Very Weak

Over the last 90 days CAP LEASE AVIATION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

FC Investment Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days FC Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, FC Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CAP LEASE and FC Investment

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

The idea behind CAP LEASE AVIATION and FC Investment 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..