Correlation Between Dividend and Till Capital

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

Diversification Opportunities for Dividend and Till Capital

0.79

Correlation Coefficient

Dividend  Till Capital

Poor diversification

The 3 months correlation between Dividend and Till is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dividend 15 Split and Till Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Till 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 Till Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Till Capital has no effect on the direction of Dividend i.e., Dividend and Till Capital go up and down completely randomly.

Pair Corralation between Dividend and Till Capital

Assuming the 90 days trading horizon Dividend 15 Split is expected to under-perform the Till Capital. In addition to that, Dividend is 3.13 times more volatile than Till Capital. It trades about -0.04 of its total potential returns per unit of risk. Till Capital is currently generating about -0.1 per unit of volatility. If you would invest  106.00  in Till Capital on December 30, 2024 and sell it today you would lose (4.00) from holding Till Capital or give up 3.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Dividend 15 Split  vs.  Till Capital

Dividend 15 Split

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dividend 15 Split has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Dividend is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Till Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Till Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Till Capital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Dividend and Till Capital

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

The idea behind Dividend 15 Split and Till 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.