Correlation Between Dividend and Pinetree Capital

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

By analyzing existing cross correlation between Dividend 15 Split and Pinetree Capital, you can compare the effects of market volatilities on Dividend and Pinetree Capital 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 Dividend with a short position of Pinetree Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dividend and Pinetree Capital.

Diversification Opportunities for Dividend and Pinetree Capital

0.77

Correlation Coefficient

Dividend  Pinetree Capital

Poor diversification

The 3 months correlation between Dividend and Pinetree is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dividend 15 Split and Pinetree Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinetree Capital and Dividend 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 Dividend 15 Split are associated (or correlated) with Pinetree Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinetree Capital has no effect on the direction of Dividend i.e., Dividend and Pinetree Capital go up and down completely randomly.

Pair Corralation between Dividend and Pinetree Capital

Assuming the 90 days horizon Dividend 15 Split is expected to under-perform the Pinetree Capital. But the stock apears to be less risky and, when comparing its historical volatility, Dividend 15 Split is 2.78 times less risky than Pinetree Capital. The stock trades about -0.06 of its potential returns per unit of risk. The Pinetree Capital is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,131  in Pinetree Capital on October 9, 2024 and sell it today you would earn a total of  14.00  from holding Pinetree Capital or generate 1.24% return on investment over 90 days.

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

Dividend 15 Split  vs.  Pinetree Capital

Dividend 15 Split

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend 15 Split are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dividend may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pinetree Capital

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pinetree Capital are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Pinetree Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dividend and Pinetree Capital

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

The idea behind Dividend 15 Split and Pinetree Capital 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.