Correlation Between OFFICIAL TRUMP and CAPP

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

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

Diversification Opportunities for OFFICIAL TRUMP and CAPP

-0.32

Correlation Coefficient

OFFICIAL TRUMP  CAPP

Very good diversification

The 3 months correlation between OFFICIAL and CAPP is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding OFFICIAL TRUMP and CAPP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAPP and OFFICIAL TRUMP 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 OFFICIAL TRUMP are associated (or correlated) with CAPP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAPP has no effect on the direction of OFFICIAL TRUMP i.e., OFFICIAL TRUMP and CAPP go up and down completely randomly.

Pair Corralation between OFFICIAL TRUMP and CAPP

Assuming the 90 days trading horizon OFFICIAL TRUMP is expected to under-perform the CAPP. In addition to that, OFFICIAL TRUMP is 2.62 times more volatile than CAPP. It trades about -0.03 of its total potential returns per unit of risk. CAPP is currently generating about 0.19 per unit of volatility. If you would invest  0.01  in CAPP on May 2, 2025 and sell it today you would earn a total of  0.00  from holding CAPP or generate 25.86% return on investment over 90 days.

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

OFFICIAL TRUMP  vs.  CAPP

OFFICIAL TRUMP

Risk-Adjusted Performance

Very Weak

Over the last 90 days OFFICIAL TRUMP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for OFFICIAL TRUMP shareholders.

CAPP

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CAPP are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, CAPP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OFFICIAL TRUMP and CAPP

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

The idea behind OFFICIAL TRUMP and CAPP 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.