Correlation Between EGold and RHOC

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

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

Diversification Opportunities for EGold and RHOC

-0.21

Correlation Coefficient

EGold  RHOC

Very good diversification

The 3 months correlation between EGold and RHOC is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding eGold and RHOC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RHOC and EGold 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 eGold are associated (or correlated) with RHOC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RHOC has no effect on the direction of EGold i.e., EGold and RHOC go up and down completely randomly.

Pair Corralation between EGold and RHOC

If you would invest  21.00  in RHOC on January 30, 2024 and sell it today you would earn a total of  0.00  from holding RHOC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

eGold  vs.  RHOC

eGold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days eGold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for eGold shareholders.

RHOC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with EGold and RHOC

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

The idea behind eGold and RHOC 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.