Correlation Between Capital One and Sezzle

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

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

Diversification Opportunities for Capital One and Sezzle

0.0

Correlation Coefficient

Capital One  Sezzle

Pay attention - limited upside

The 3 months correlation between Capital and Sezzle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capital One Financial and Sezzle Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sezzle Inc and Capital One 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 Capital One Financial are associated (or correlated) with Sezzle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sezzle Inc has no effect on the direction of Capital One i.e., Capital One and Sezzle go up and down completely randomly.

Pair Corralation between Capital One and Sezzle

If you would invest  17,740  in Capital One Financial on December 28, 2024 and sell it today you would earn a total of  75.00  from holding Capital One Financial or generate 0.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Capital One Financial  vs.  Sezzle Inc

Capital One Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Capital One Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Capital One is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Sezzle Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sezzle Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Sezzle is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Capital One and Sezzle

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

The idea behind Capital One Financial and Sezzle Inc 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.