Correlation Between Capitol Series and SPDR Nuveen

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

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

Diversification Opportunities for Capitol Series and SPDR Nuveen

-0.36

Correlation Coefficient

Capitol Series  SPDR Nuveen

Very good diversification

The 3 months correlation between Capitol and SPDR is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Capitol Series Trust and SPDR Nuveen Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Nuveen Municipal and Capitol Series 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 Capitol Series Trust are associated (or correlated) with SPDR Nuveen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Nuveen Municipal has no effect on the direction of Capitol Series i.e., Capitol Series and SPDR Nuveen go up and down completely randomly.

Pair Corralation between Capitol Series and SPDR Nuveen

Considering the 90-day investment horizon Capitol Series Trust is expected to under-perform the SPDR Nuveen. In addition to that, Capitol Series is 7.83 times more volatile than SPDR Nuveen Municipal. It trades about -0.13 of its total potential returns per unit of risk. SPDR Nuveen Municipal is currently generating about 0.1 per unit of volatility. If you would invest  2,717  in SPDR Nuveen Municipal on December 19, 2024 and sell it today you would earn a total of  34.00  from holding SPDR Nuveen Municipal or generate 1.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Capitol Series Trust  vs.  SPDR Nuveen Municipal

Capitol Series Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capitol Series Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Etf's basic 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 fund shareholders.

SPDR Nuveen Municipal

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Nuveen Municipal are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SPDR Nuveen is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Capitol Series and SPDR Nuveen

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

The idea behind Capitol Series Trust and SPDR Nuveen Municipal 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.