Correlation Between Rani Zim and Peninsula

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

Diversification Opportunities for Rani Zim and Peninsula

0.5

Correlation Coefficient

Rani Zim  Peninsula

Very weak diversification

The 3 months correlation between Rani and Peninsula is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Rani Zim Shopping and Peninsula Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Group 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 Peninsula. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Group has no effect on the direction of Rani Zim i.e., Rani Zim and Peninsula go up and down completely randomly.

Pair Corralation between Rani Zim and Peninsula

Assuming the 90 days trading horizon Rani Zim is expected to generate 1.67 times less return on investment than Peninsula. But when comparing it to its historical volatility, Rani Zim Shopping is 1.16 times less risky than Peninsula. It trades about 0.07 of its potential returns per unit of risk. Peninsula Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  20,227  in Peninsula Group on December 30, 2024 and sell it today you would earn a total of  2,463  from holding Peninsula Group or generate 12.18% return on investment over 90 days.

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

Rani Zim Shopping  vs.  Peninsula Group

Rani Zim Shopping

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rani Zim Shopping are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Rani Zim may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Peninsula Group

Risk-Adjusted Performance

OK

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

Pair Trading with Rani Zim and Peninsula

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

The idea behind Rani Zim Shopping and Peninsula Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.