Correlation Between Cannae Holdings and Roadzen

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

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

Diversification Opportunities for Cannae Holdings and Roadzen

0.52

Correlation Coefficient

Cannae Holdings  Roadzen

Very weak diversification

The 3 months correlation between Cannae and Roadzen is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cannae Holdings and Roadzen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roadzen and Cannae Holdings 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 Cannae Holdings are associated (or correlated) with Roadzen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roadzen has no effect on the direction of Cannae Holdings i.e., Cannae Holdings and Roadzen go up and down completely randomly.

Pair Corralation between Cannae Holdings and Roadzen

Given the investment horizon of 90 days Cannae Holdings is expected to generate 0.21 times more return on investment than Roadzen. However, Cannae Holdings is 4.83 times less risky than Roadzen. It trades about -0.15 of its potential returns per unit of risk. Roadzen is currently generating about -0.12 per unit of risk. If you would invest  1,984  in Cannae Holdings on December 20, 2024 and sell it today you would lose (286.00) from holding Cannae Holdings or give up 14.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Cannae Holdings  vs.  Roadzen

Cannae Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cannae Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Roadzen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Roadzen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Cannae Holdings and Roadzen

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

The idea behind Cannae Holdings and Roadzen 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.