Correlation Between CAP EX and Transport International

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

By analyzing existing cross correlation between CAP EX IRON ORE and Transport International Holdings, you can compare the effects of market volatilities on CAP EX and Transport International 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 CAP EX with a short position of Transport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP EX and Transport International.

Diversification Opportunities for CAP EX and Transport International

0.01

Correlation Coefficient

CAP EX  Transport International

Significant diversification

The 3 months correlation between CAP and Transport is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CAP EX IRON ORE and Transport International Holdin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport International and CAP EX 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 CAP EX IRON ORE are associated (or correlated) with Transport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport International has no effect on the direction of CAP EX i.e., CAP EX and Transport International go up and down completely randomly.

Pair Corralation between CAP EX and Transport International

Assuming the 90 days trading horizon CAP EX is expected to generate 1.48 times less return on investment than Transport International. In addition to that, CAP EX is 1.39 times more volatile than Transport International Holdings. It trades about 0.02 of its total potential returns per unit of risk. Transport International Holdings is currently generating about 0.05 per unit of volatility. If you would invest  86.00  in Transport International Holdings on April 24, 2025 and sell it today you would earn a total of  6.00  from holding Transport International Holdings or generate 6.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

CAP EX IRON ORE  vs.  Transport International Holdin

CAP EX IRON

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CAP EX IRON ORE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CAP EX may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Transport International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Transport International Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Transport International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CAP EX and Transport International

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

The idea behind CAP EX IRON ORE and Transport International Holdings 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.