Correlation Between Vanguard Total and RBB Fund

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

By analyzing existing cross correlation between Vanguard Total Bond and The RBB Fund, you can compare the effects of market volatilities on Vanguard Total and RBB Fund 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 Vanguard Total with a short position of RBB Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and RBB Fund.

Diversification Opportunities for Vanguard Total and RBB Fund

-0.73

Correlation Coefficient

Vanguard Total  RBB Fund

Pay attention - limited upside

The 3 months correlation between Vanguard and RBB is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond and The RBB Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBB Fund and Vanguard Total 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 Vanguard Total Bond are associated (or correlated) with RBB Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBB Fund has no effect on the direction of Vanguard Total i.e., Vanguard Total and RBB Fund go up and down completely randomly.

Pair Corralation between Vanguard Total and RBB Fund

Considering the 90-day investment horizon Vanguard Total Bond is expected to generate 0.22 times more return on investment than RBB Fund. However, Vanguard Total Bond is 4.45 times less risky than RBB Fund. It trades about 0.11 of its potential returns per unit of risk. The RBB Fund is currently generating about -0.08 per unit of risk. If you would invest  7,158  in Vanguard Total Bond on December 28, 2024 and sell it today you would earn a total of  132.00  from holding Vanguard Total Bond or generate 1.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Vanguard Total Bond  vs.  The RBB Fund

Vanguard Total Bond

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Total Bond are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Vanguard Total is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

RBB Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days The RBB Fund has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, RBB Fund is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vanguard Total and RBB Fund

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

The idea behind Vanguard Total Bond and The RBB 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.