Correlation Between Acorn Capital and Rural Funds

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

By analyzing existing cross correlation between Acorn Capital Investment and Rural Funds Group, you can compare the effects of market volatilities on Acorn Capital and Rural Funds 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 Acorn Capital with a short position of Rural Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acorn Capital and Rural Funds.

Diversification Opportunities for Acorn Capital and Rural Funds

0.58

Correlation Coefficient

Acorn Capital  Rural Funds

Very weak diversification

The 3 months correlation between Acorn and Rural is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Acorn Capital Investment and Rural Funds Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rural Funds Group and Acorn 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 Acorn Capital Investment are associated (or correlated) with Rural Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rural Funds Group has no effect on the direction of Acorn Capital i.e., Acorn Capital and Rural Funds go up and down completely randomly.

Pair Corralation between Acorn Capital and Rural Funds

Assuming the 90 days trading horizon Acorn Capital Investment is expected to generate 1.21 times more return on investment than Rural Funds. However, Acorn Capital is 1.21 times more volatile than Rural Funds Group. It trades about 0.16 of its potential returns per unit of risk. Rural Funds Group is currently generating about 0.08 per unit of risk. If you would invest  71.00  in Acorn Capital Investment on April 25, 2025 and sell it today you would earn a total of  10.00  from holding Acorn Capital Investment or generate 14.08% return on investment over 90 days.

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

Acorn Capital Investment  vs.  Rural Funds Group

Acorn Capital Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Acorn Capital Investment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Acorn Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Rural Funds Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rural Funds Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Rural Funds is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Acorn Capital and Rural Funds

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

The idea behind Acorn Capital Investment and Rural Funds 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.