Correlation Between Grandeur Peak and Rondure New

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

By analyzing existing cross correlation between Grandeur Peak Global and Rondure New World, you can compare the effects of market volatilities on Grandeur Peak and Rondure New 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 Grandeur Peak with a short position of Rondure New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grandeur Peak and Rondure New.

Diversification Opportunities for Grandeur Peak and Rondure New

-0.32

Correlation Coefficient

Grandeur Peak  Rondure New

Very good diversification

The 3 months correlation between Grandeur and Rondure is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Grandeur Peak Global and Rondure New World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rondure New World and Grandeur Peak 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 Grandeur Peak Global are associated (or correlated) with Rondure New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rondure New World has no effect on the direction of Grandeur Peak i.e., Grandeur Peak and Rondure New go up and down completely randomly.

Pair Corralation between Grandeur Peak and Rondure New

Assuming the 90 days horizon Grandeur Peak Global is expected to generate 3.26 times more return on investment than Rondure New. However, Grandeur Peak is 3.26 times more volatile than Rondure New World. It trades about 0.05 of its potential returns per unit of risk. Rondure New World is currently generating about -0.03 per unit of risk. If you would invest  1,615  in Grandeur Peak Global on September 13, 2024 and sell it today you would earn a total of  38.00  from holding Grandeur Peak Global or generate 2.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

Grandeur Peak Global  vs.  Rondure New World

Grandeur Peak Global

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grandeur Peak Global are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Grandeur Peak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rondure New World

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rondure New World has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Rondure New is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grandeur Peak and Rondure New

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

The idea behind Grandeur Peak Global and Rondure New World 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 Commodity Directory module to find actively traded commodities issued by global exchanges.