Correlation Between Rand Capital and Professional Holding

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

Diversification Opportunities for Rand Capital and Professional Holding

0.24

Correlation Coefficient

Rand Capital  Professional Holding

Modest diversification

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

Pair Corralation between Rand Capital and Professional Holding

If you would invest  1,723  in Rand Capital Corp on September 14, 2024 and sell it today you would earn a total of  385.00  from holding Rand Capital Corp or generate 22.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Rand Capital Corp  vs.  Professional Holding Corp

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.

Professional Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Professional Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Professional Holding is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Rand Capital and Professional Holding

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

The idea behind Rand Capital Corp and Professional Holding Corp 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.