Correlation Between Rani Zim and Generation Capital

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

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

Diversification Opportunities for Rani Zim and Generation Capital

0.82

Correlation Coefficient

Rani Zim  Generation Capital

Very poor diversification

The 3 months correlation between Rani and Generation is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Rani Zim Shopping and Generation Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Capital and Rani Zim 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 Rani Zim Shopping are associated (or correlated) with Generation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Capital has no effect on the direction of Rani Zim i.e., Rani Zim and Generation Capital go up and down completely randomly.

Pair Corralation between Rani Zim and Generation Capital

Assuming the 90 days trading horizon Rani Zim Shopping is expected to generate 0.92 times more return on investment than Generation Capital. However, Rani Zim Shopping is 1.08 times less risky than Generation Capital. It trades about 0.18 of its potential returns per unit of risk. Generation Capital is currently generating about 0.05 per unit of risk. If you would invest  38,920  in Rani Zim Shopping on December 2, 2024 and sell it today you would earn a total of  8,000  from holding Rani Zim Shopping or generate 20.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Rani Zim Shopping  vs.  Generation Capital

Rani Zim Shopping

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rani Zim Shopping are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Rani Zim sustained solid returns over the last few months and may actually be approaching a breakup point.

Generation Capital

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Generation Capital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Generation Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Rani Zim and Generation Capital

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

The idea behind Rani Zim Shopping and Generation Capital 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.