Correlation Between Capitol Series and Via Renewables

Can any of the company-specific risk be diversified away by investing in both Capitol Series and Via Renewables 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 Via Renewables 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 Via Renewables, you can compare the effects of market volatilities on Capitol Series and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitol Series and Via Renewables.

Diversification Opportunities for Capitol Series and Via Renewables

0.81

Correlation Coefficient

Capitol Series  Via Renewables

Very poor diversification

The 3 months correlation between Capitol and Via is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Capitol Series Trust and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Capitol Series i.e., Capitol Series and Via Renewables go up and down completely randomly.

Pair Corralation between Capitol Series and Via Renewables

Considering the 90-day investment horizon Capitol Series Trust is expected to generate 25.54 times more return on investment than Via Renewables. However, Capitol Series is 25.54 times more volatile than Via Renewables. It trades about 0.13 of its potential returns per unit of risk. Via Renewables is currently generating about 0.09 per unit of risk. If you would invest  2,691  in Capitol Series Trust on September 18, 2024 and sell it today you would earn a total of  7,489  from holding Capitol Series Trust or generate 278.3% return on investment over 90 days.

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

Capitol Series Trust  vs.  Via Renewables

Capitol Series Trust

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capitol Series Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Capitol Series exhibited solid returns over the last few months and may actually be approaching a breakup point.

Via Renewables

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Capitol Series and Via Renewables

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

The idea behind Capitol Series Trust and Via Renewables 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.