Correlation Between Rbb Fund and Gotham Neutral

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

By analyzing existing cross correlation between Rbb Fund Trust and Gotham Neutral Fund, you can compare the effects of market volatilities on Rbb Fund and Gotham Neutral 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 Gotham Neutral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbb Fund and Gotham Neutral.

Diversification Opportunities for Rbb Fund and Gotham Neutral

0.58

Correlation Coefficient

Rbb Fund  Gotham Neutral

Very weak diversification

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

Pair Corralation between Rbb Fund and Gotham Neutral

Assuming the 90 days horizon Rbb Fund Trust is expected to generate 2.76 times more return on investment than Gotham Neutral. However, Rbb Fund is 2.76 times more volatile than Gotham Neutral Fund. It trades about 0.09 of its potential returns per unit of risk. Gotham Neutral Fund is currently generating about 0.02 per unit of risk. If you would invest  1,086  in Rbb Fund Trust on December 19, 2024 and sell it today you would earn a total of  43.00  from holding Rbb Fund Trust or generate 3.96% return on investment over 90 days.

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

Rbb Fund Trust  vs.  Gotham Neutral Fund

Rbb Fund Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rbb Fund Trust are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and 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.

Gotham Neutral

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gotham Neutral Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Gotham Neutral is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rbb Fund and Gotham Neutral

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

The idea behind Rbb Fund Trust and Gotham Neutral 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 Transaction History module to view history of all your transactions and understand their impact on performance.