Correlation Between Rand Capital and LuxUrban Hotels

Can any of the company-specific risk be diversified away by investing in both Rand Capital and LuxUrban Hotels 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 LuxUrban Hotels 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 LuxUrban Hotels 1300, you can compare the effects of market volatilities on Rand Capital and LuxUrban Hotels 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 LuxUrban Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rand Capital and LuxUrban Hotels.

Diversification Opportunities for Rand Capital and LuxUrban Hotels

0.0

Correlation Coefficient

Rand Capital  LuxUrban Hotels

Pay attention - limited upside

The 3 months correlation between Rand and LuxUrban is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rand Capital Corp and LuxUrban Hotels 1300 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LuxUrban Hotels 1300 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 LuxUrban Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LuxUrban Hotels 1300 has no effect on the direction of Rand Capital i.e., Rand Capital and LuxUrban Hotels go up and down completely randomly.

Pair Corralation between Rand Capital and LuxUrban Hotels

If you would invest  1,686  in Rand Capital Corp on December 20, 2024 and sell it today you would earn a total of  300.00  from holding Rand Capital Corp or generate 17.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Rand Capital Corp  vs.  LuxUrban Hotels 1300

Rand Capital Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rand Capital Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Rand Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

LuxUrban Hotels 1300

Risk-Adjusted Performance

Very Weak

Over the last 90 days LuxUrban Hotels 1300 has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, LuxUrban Hotels is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Rand Capital and LuxUrban Hotels

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

The idea behind Rand Capital Corp and LuxUrban Hotels 1300 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.