Correlation Between Zedcor Energy and Paradigm Micro-cap

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

By analyzing existing cross correlation between Zedcor Energy and Paradigm Micro Cap Fund, you can compare the effects of market volatilities on Zedcor Energy and Paradigm Micro-cap 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 Zedcor Energy with a short position of Paradigm Micro-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zedcor Energy and Paradigm Micro-cap.

Diversification Opportunities for Zedcor Energy and Paradigm Micro-cap

-0.17

Correlation Coefficient

Zedcor Energy  Paradigm Micro-cap

Good diversification

The 3 months correlation between Zedcor and Paradigm is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Zedcor Energy and Paradigm Micro Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paradigm Micro Cap and Zedcor Energy 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 Zedcor Energy are associated (or correlated) with Paradigm Micro-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paradigm Micro Cap has no effect on the direction of Zedcor Energy i.e., Zedcor Energy and Paradigm Micro-cap go up and down completely randomly.

Pair Corralation between Zedcor Energy and Paradigm Micro-cap

Assuming the 90 days horizon Zedcor Energy is expected to under-perform the Paradigm Micro-cap. In addition to that, Zedcor Energy is 1.66 times more volatile than Paradigm Micro Cap Fund. It trades about -0.15 of its total potential returns per unit of risk. Paradigm Micro Cap Fund is currently generating about 0.2 per unit of volatility. If you would invest  5,084  in Paradigm Micro Cap Fund on September 8, 2025 and sell it today you would earn a total of  376.00  from holding Paradigm Micro Cap Fund or generate 7.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Zedcor Energy  vs.  Paradigm Micro Cap Fund

Zedcor Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zedcor Energy are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Zedcor Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Paradigm Micro Cap

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Paradigm Micro Cap Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Paradigm Micro-cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zedcor Energy and Paradigm Micro-cap

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

The idea behind Zedcor Energy and Paradigm Micro Cap Fund 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.