Correlation Between MCAN Mortgage and Rand Capital
Can any of the company-specific risk be diversified away by investing in both MCAN Mortgage 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 MCAN Mortgage and Rand Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCAN Mortgage and Rand Capital Corp, you can compare the effects of market volatilities on MCAN Mortgage 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 MCAN Mortgage with a short position of Rand Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCAN Mortgage and Rand Capital.
Diversification Opportunities for MCAN Mortgage and Rand Capital
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MCAN and Rand is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding MCAN Mortgage 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 MCAN Mortgage 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 MCAN Mortgage 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 MCAN Mortgage i.e., MCAN Mortgage and Rand Capital go up and down completely randomly.
Pair Corralation between MCAN Mortgage and Rand Capital
Assuming the 90 days horizon MCAN Mortgage is expected to generate 4.61 times less return on investment than Rand Capital. But when comparing it to its historical volatility, MCAN Mortgage is 3.03 times less risky than Rand Capital. It trades about 0.22 of its potential returns per unit of risk. Rand Capital Corp is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,640 in Rand Capital Corp on September 12, 2024 and sell it today you would earn a total of 468.00 from holding Rand Capital Corp or generate 28.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
MCAN Mortgage vs. Rand Capital Corp
Performance |
| Timeline |
| MCAN Mortgage |
| Rand Capital Corp |
MCAN Mortgage and Rand Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCAN Mortgage and Rand Capital
The main advantage of trading using opposite MCAN Mortgage and Rand Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCAN Mortgage 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.| MCAN Mortgage vs. Guild Holdings Co | MCAN Mortgage vs. Mr Cooper Group | MCAN Mortgage vs. Encore Capital Group | MCAN Mortgage vs. CNFinance Holdings |
| Rand Capital vs. Stellus Capital Investment | Rand Capital vs. Prospect Capital | Rand Capital vs. Gladstone Capital | Rand Capital vs. Main Street Capital |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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