Correlation Between Roth CH and Capital One

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

By analyzing existing cross correlation between Roth CH Acquisition and Capital One Financial, you can compare the effects of market volatilities on Roth CH and Capital One 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 Roth CH with a short position of Capital One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roth CH and Capital One.

Diversification Opportunities for Roth CH and Capital One

0.0

Correlation Coefficient

Roth CH  Capital One

Pay attention - limited upside

The 3 months correlation between Roth and Capital is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Roth CH Acquisition and Capital One Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital One Financial and Roth CH 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 Roth CH Acquisition are associated (or correlated) with Capital One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital One Financial has no effect on the direction of Roth CH i.e., Roth CH and Capital One go up and down completely randomly.

Pair Corralation between Roth CH and Capital One

If you would invest  18,696  in Capital One Financial on December 1, 2024 and sell it today you would earn a total of  1,359  from holding Capital One Financial or generate 7.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Roth CH Acquisition  vs.  Capital One Financial

Roth CH Acquisition

Risk-Adjusted Performance

Very Weak

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

Capital One Financial

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Capital One Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Capital One may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Roth CH and Capital One

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

The idea behind Roth CH Acquisition and Capital One Financial 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.