Correlation Between Capital Point and Iargento

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

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

Diversification Opportunities for Capital Point and Iargento

-0.02

Correlation Coefficient

Capital Point  Iargento

Good diversification

The 3 months correlation between Capital and Iargento is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Capital Point and Iargento Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iargento Hi Tech and Capital Point 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 Capital Point are associated (or correlated) with Iargento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iargento Hi Tech has no effect on the direction of Capital Point i.e., Capital Point and Iargento go up and down completely randomly.

Pair Corralation between Capital Point and Iargento

Assuming the 90 days trading horizon Capital Point is expected to under-perform the Iargento. But the stock apears to be less risky and, when comparing its historical volatility, Capital Point is 3.08 times less risky than Iargento. The stock trades about -0.13 of its potential returns per unit of risk. The Iargento Hi Tech is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  14,120  in Iargento Hi Tech on August 25, 2025 and sell it today you would lose (1,070) from holding Iargento Hi Tech or give up 7.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.31%
Values	Daily Returns

Capital Point  vs.  Iargento Hi Tech

Capital Point

Risk-Adjusted Performance

Weakest

Over the last 90 days Capital Point has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Iargento Hi Tech

Risk-Adjusted Performance

Weakest

Over the last 90 days Iargento Hi Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Capital Point and Iargento

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

The idea behind Capital Point and Iargento Hi Tech 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.