Correlation Between Rand Capital and BSIG Old

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

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

Diversification Opportunities for Rand Capital and BSIG Old

0.0

Correlation Coefficient

Rand Capital  BSIG Old

Pay attention - limited upside

The 3 months correlation between Rand and BSIG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rand Capital Corp and BSIG Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSIG Old and Rand Capital 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 Rand Capital Corp are associated (or correlated) with BSIG Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSIG Old has no effect on the direction of Rand Capital i.e., Rand Capital and BSIG Old go up and down completely randomly.

Pair Corralation between Rand Capital and BSIG Old

If you would invest  1,925  in Rand Capital Corp on December 30, 2024 and sell it today you would lose (8.00) from holding Rand Capital Corp or give up 0.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Rand Capital Corp  vs.  BSIG Old

Rand Capital Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rand Capital Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Rand Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BSIG Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days BSIG Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, BSIG Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Rand Capital and BSIG Old

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

The idea behind Rand Capital Corp and BSIG Old 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.