Correlation Between IShares Interest and Rbb Fund

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

By analyzing existing cross correlation between iShares Interest Rate and Rbb Fund , you can compare the effects of market volatilities on IShares Interest 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 IShares Interest with a short position of Rbb Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Interest and Rbb Fund.

Diversification Opportunities for IShares Interest and Rbb Fund

0.95

Correlation Coefficient

IShares Interest  Rbb Fund

Almost no diversification

The 3 months correlation between IShares and Rbb is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iShares Interest Rate and Rbb Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbb Fund and IShares Interest 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 iShares Interest Rate 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 IShares Interest i.e., IShares Interest and Rbb Fund go up and down completely randomly.

Pair Corralation between IShares Interest and Rbb Fund

Given the investment horizon of 90 days iShares Interest Rate is expected to generate 3.8 times more return on investment than Rbb Fund. However, IShares Interest is 3.8 times more volatile than Rbb Fund . It trades about 0.29 of its potential returns per unit of risk. Rbb Fund is currently generating about 0.26 per unit of risk. If you would invest  9,064  in iShares Interest Rate on September 3, 2024 and sell it today you would earn a total of  307.00  from holding iShares Interest Rate or generate 3.39% return on investment over 90 days.

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

iShares Interest Rate  vs.  Rbb Fund

iShares Interest Rate

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Interest Rate are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, IShares Interest is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Rbb Fund

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rbb Fund are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, Rbb Fund is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with IShares Interest and Rbb Fund

The main advantage of trading using opposite IShares Interest and Rbb Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Interest 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 iShares Interest Rate and 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.