Correlation Between Associated Capital and Rand Capital
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Rand Capital 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 Associated Capital and Rand Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Rand Capital Corp, you can compare the effects of market volatilities on Associated Capital and Rand Capital 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 Associated Capital with a short position of Rand Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Rand Capital.
Diversification Opportunities for Associated Capital and Rand Capital
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Associated and Rand is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Rand Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rand Capital Corp and Associated 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 Associated Capital Group are associated (or correlated) with Rand Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rand Capital Corp has no effect on the direction of Associated Capital i.e., Associated Capital and Rand Capital go up and down completely randomly.
Pair Corralation between Associated Capital and Rand Capital
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 4.65 times less return on investment than Rand Capital. But when comparing it to its historical volatility, Associated Capital Group is 1.0 times less risky than Rand Capital. It trades about 0.03 of its potential returns per unit of risk. Rand Capital Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,613 in Rand Capital Corp on August 28, 2024 and sell it today you would earn a total of 36.00 from holding Rand Capital Corp or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Associated Capital Group vs. Rand Capital Corp
Performance |
| Timeline |
| Associated Capital |
| Rand Capital Corp |
Associated Capital and Rand Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Rand Capital
The main advantage of trading using opposite Associated Capital and Rand Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Rand Capital 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 Rand Capital will offset losses from the drop in Rand Capital's long position.| Associated Capital vs. PowerUp Acquisition Corp | Associated Capital vs. Aurora Innovation | Associated Capital vs. HUMANA INC | Associated Capital vs. Aquagold International |
| Rand Capital vs. PowerUp Acquisition Corp | Rand Capital vs. Aurora Innovation | Rand Capital vs. HUMANA INC | Rand Capital vs. Aquagold International |
Check out your portfolio center.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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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