Correlation Between Rafael Holdings and Capital Properties

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

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

Diversification Opportunities for Rafael Holdings and Capital Properties

-0.41

Correlation Coefficient

Rafael Holdings  Capital Properties

Very good diversification

The 3 months correlation between Rafael and Capital is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Rafael Holdings Class and Capital Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Properties and Rafael Holdings 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 Rafael Holdings Class are associated (or correlated) with Capital Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Properties has no effect on the direction of Rafael Holdings i.e., Rafael Holdings and Capital Properties go up and down completely randomly.

Pair Corralation between Rafael Holdings and Capital Properties

If you would invest  189.00  in Rafael Holdings Class on October 12, 2024 and sell it today you would earn a total of  5.00  from holding Rafael Holdings Class or generate 2.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

Rafael Holdings Class  vs.  Capital Properties

Rafael Holdings Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rafael Holdings Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Capital Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Capital Properties is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Rafael Holdings and Capital Properties

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

The idea behind Rafael Holdings Class and Capital Properties 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.