Correlation Between RENN Fund and Rand Capital
Can any of the company-specific risk be diversified away by investing in both RENN Fund 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 RENN Fund and Rand Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RENN Fund and Rand Capital Corp, you can compare the effects of market volatilities on RENN Fund 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 RENN Fund with a short position of Rand Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of RENN Fund and Rand Capital.
Diversification Opportunities for RENN Fund and Rand Capital
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RENN and Rand is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding RENN Fund 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 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 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 RENN Fund i.e., RENN Fund and Rand Capital go up and down completely randomly.
Pair Corralation between RENN Fund and Rand Capital
Considering the 90-day investment horizon RENN Fund is expected to generate 27.75 times less return on investment than Rand Capital. In addition to that, RENN Fund is 1.6 times more volatile than Rand Capital Corp. It trades about 0.01 of its total potential returns per unit of risk. Rand Capital Corp is currently generating about 0.43 per unit of volatility. If you would invest 1,933 in Rand Capital Corp on November 8, 2024 and sell it today you would earn a total of 368.00 from holding Rand Capital Corp or generate 19.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RENN Fund vs. Rand Capital Corp
Performance |
| Timeline |
| RENN Fund |
| Rand Capital Corp |
RENN Fund and Rand Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RENN Fund and Rand Capital
The main advantage of trading using opposite RENN Fund and Rand Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RENN Fund 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.| RENN Fund vs. Ellsworth Convertible Growth | RENN Fund vs. Delaware Investments Florida | RENN Fund vs. Nuveen New Jersey | RENN Fund vs. John Hancock Hedged |
| Rand Capital vs. Blackstone Gso Long | Rand Capital vs. First Trust Senior | Rand Capital vs. Eaton Vance Senior | Rand Capital vs. Princeton 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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