Correlation Between Rand Capital and Zoomcar Holdings

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

Diversification Opportunities for Rand Capital and Zoomcar Holdings

-0.24

Correlation Coefficient

Rand Capital  Zoomcar Holdings

Very good diversification

The 3 months correlation between Rand and Zoomcar is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Rand Capital Corp and Zoomcar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomcar Holdings 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 Zoomcar Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomcar Holdings has no effect on the direction of Rand Capital i.e., Rand Capital and Zoomcar Holdings go up and down completely randomly.

Pair Corralation between Rand Capital and Zoomcar Holdings

Given the investment horizon of 90 days Rand Capital is expected to generate 17.81 times less return on investment than Zoomcar Holdings. But when comparing it to its historical volatility, Rand Capital Corp is 10.96 times less risky than Zoomcar Holdings. It trades about 0.07 of its potential returns per unit of risk. Zoomcar Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2.51  in Zoomcar Holdings on September 14, 2024 and sell it today you would lose (1.30) from holding Zoomcar Holdings or give up 51.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.21%
Values	Daily Returns

Rand Capital Corp  vs.  Zoomcar Holdings

Rand Capital Corp

Risk-Adjusted Performance

10 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rand Capital Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Rand Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Zoomcar Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zoomcar Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Zoomcar Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rand Capital and Zoomcar Holdings

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

The idea behind Rand Capital Corp and Zoomcar Holdings 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..