Correlation Between RENN Fund and Equus Total
Can any of the company-specific risk be diversified away by investing in both RENN Fund and Equus Total 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 RENN Fund and Equus Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RENN Fund and Equus Total Return, you can compare the effects of market volatilities on RENN Fund and Equus Total 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 RENN Fund with a short position of Equus Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of RENN Fund and Equus Total.
Diversification Opportunities for RENN Fund and Equus Total
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RENN and Equus is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding RENN Fund and Equus Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equus Total Return and RENN Fund 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 RENN Fund are associated (or correlated) with Equus Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equus Total Return has no effect on the direction of RENN Fund i.e., RENN Fund and Equus Total go up and down completely randomly.
Pair Corralation between RENN Fund and Equus Total
Considering the 90-day investment horizon RENN Fund is expected to generate 7.67 times less return on investment than Equus Total. But when comparing it to its historical volatility, RENN Fund is 1.63 times less risky than Equus Total. It trades about 0.06 of its potential returns per unit of risk. Equus Total Return is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 102.00 in Equus Total Return on November 9, 2024 and sell it today you would earn a total of 34.00 from holding Equus Total Return or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RENN Fund vs. Equus Total Return
Performance |
| Timeline |
| RENN Fund |
| Equus Total Return |
RENN Fund and Equus Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RENN Fund and Equus Total
The main advantage of trading using opposite RENN Fund and Equus Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RENN Fund position performs unexpectedly, Equus Total 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 Equus Total will offset losses from the drop in Equus Total's long position.| RENN Fund vs. Ellsworth Convertible Growth | RENN Fund vs. Delaware Investments Florida | RENN Fund vs. Nuveen New Jersey | RENN Fund vs. John Hancock Hedged |
| Equus Total vs. Rand Capital Corp | Equus Total vs. Gabelli Convertible And | Equus Total vs. Mfs Intermediate High | Equus Total vs. RENN Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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