Correlation Between Tortoise Capital and DTF Tax

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

By analyzing existing cross correlation between Tortoise Capital Series and DTF Tax Free, you can compare the effects of market volatilities on Tortoise Capital and DTF Tax 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 Tortoise Capital with a short position of DTF Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tortoise Capital and DTF Tax.

Diversification Opportunities for Tortoise Capital and DTF Tax

0.55

Correlation Coefficient

Tortoise Capital  DTF Tax

Very weak diversification

The 3 months correlation between Tortoise and DTF is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Tortoise Capital Series and DTF Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DTF Tax Free and Tortoise Capital 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 Tortoise Capital Series are associated (or correlated) with DTF Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DTF Tax Free has no effect on the direction of Tortoise Capital i.e., Tortoise Capital and DTF Tax go up and down completely randomly.

Pair Corralation between Tortoise Capital and DTF Tax

Considering the 90-day investment horizon Tortoise Capital Series is expected to generate 3.11 times more return on investment than DTF Tax. However, Tortoise Capital is 3.11 times more volatile than DTF Tax Free. It trades about 0.2 of its potential returns per unit of risk. DTF Tax Free is currently generating about 0.04 per unit of risk. If you would invest  1,797  in Tortoise Capital Series on September 14, 2024 and sell it today you would earn a total of  232.00  from holding Tortoise Capital Series or generate 12.91% return on investment over 90 days.

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

Tortoise Capital Series  vs.  DTF Tax Free

Tortoise Capital Series

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tortoise Capital Series are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady basic indicators, Tortoise Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

DTF Tax Free

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DTF Tax Free are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, DTF Tax is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tortoise Capital and DTF Tax

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

The idea behind Tortoise Capital Series and DTF Tax Free 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.