Correlation Between Rbb Fund and Alps/kotak India

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

By analyzing existing cross correlation between Rbb Fund and Alpskotak India Growth, you can compare the effects of market volatilities on Rbb Fund and Alps/kotak India 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 Rbb Fund with a short position of Alps/kotak India. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbb Fund and Alps/kotak India.

Diversification Opportunities for Rbb Fund and Alps/kotak India

-0.28

Correlation Coefficient

Rbb Fund  Alps/kotak India

Very good diversification

The 3 months correlation between Rbb and Alps/kotak is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Rbb Fund and Alpskotak India Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpskotak India Growth and Rbb Fund 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 Rbb Fund are associated (or correlated) with Alps/kotak India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpskotak India Growth has no effect on the direction of Rbb Fund i.e., Rbb Fund and Alps/kotak India go up and down completely randomly.

Pair Corralation between Rbb Fund and Alps/kotak India

Assuming the 90 days horizon Rbb Fund is expected to generate 0.07 times more return on investment than Alps/kotak India. However, Rbb Fund is 13.4 times less risky than Alps/kotak India. It trades about -0.02 of its potential returns per unit of risk. Alpskotak India Growth is currently generating about -0.27 per unit of risk. If you would invest  976.00  in Rbb Fund on October 9, 2024 and sell it today you would lose (1.00) from holding Rbb Fund or give up 0.1% of portfolio value over 90 days.

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

Rbb Fund   vs.  Alpskotak India Growth

Rbb Fund

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rbb Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Rbb Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alpskotak India Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpskotak India Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Rbb Fund and Alps/kotak India

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

The idea behind Rbb Fund and Alpskotak India Growth 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.