Correlation Between Altrius Global and Capital Group

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

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

Diversification Opportunities for Altrius Global and Capital Group

0.92

Correlation Coefficient

Altrius Global  Capital Group

Almost no diversification

The 3 months correlation between Altrius and Capital is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Altrius Global Dividend and Capital Group Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Dividend and Altrius Global 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 Altrius Global Dividend are associated (or correlated) with Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Dividend has no effect on the direction of Altrius Global i.e., Altrius Global and Capital Group go up and down completely randomly.

Pair Corralation between Altrius Global and Capital Group

Given the investment horizon of 90 days Altrius Global Dividend is expected to under-perform the Capital Group. But the etf apears to be less risky and, when comparing its historical volatility, Altrius Global Dividend is 1.17 times less risky than Capital Group. The etf trades about -0.24 of its potential returns per unit of risk. The Capital Group Dividend is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  3,050  in Capital Group Dividend on October 9, 2024 and sell it today you would lose (74.00) from holding Capital Group Dividend or give up 2.43% of portfolio value over 90 days.

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

Altrius Global Dividend  vs.  Capital Group Dividend

Altrius Global Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altrius Global Dividend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Altrius Global is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Capital Group Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Group Dividend has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Capital Group is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Altrius Global and Capital Group

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

The idea behind Altrius Global Dividend and Capital Group Dividend 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.