Correlation Between Getty Images and Capstead Mortgage

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

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

Diversification Opportunities for Getty Images and Capstead Mortgage

0.0

Correlation Coefficient

Getty Images  Capstead Mortgage

Pay attention - limited upside

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

Pair Corralation between Getty Images and Capstead Mortgage

If you would invest (100.00) in Capstead Mortgage on January 28, 2024 and sell it today you would earn a total of  100.00  from holding Capstead Mortgage or generate -100.0% return on investment over 90 days.

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

Getty Images Holdings  vs.  Capstead Mortgage

Getty Images Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Images Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent 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.

Capstead Mortgage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capstead Mortgage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Capstead Mortgage is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Getty Images and Capstead Mortgage

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

The idea behind Getty Images Holdings and Capstead Mortgage 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.