Correlation Between RB Capital and BRB Banco

Can any of the company-specific risk be diversified away by investing in both RB Capital and BRB Banco 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 RB Capital and BRB Banco into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RB Capital Development and BRB Banco, you can compare the effects of market volatilities on RB Capital and BRB Banco 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 RB Capital with a short position of BRB Banco. Check out your portfolio center. Please also check ongoing floating volatility patterns of RB Capital and BRB Banco.

Diversification Opportunities for RB Capital and BRB Banco

0.0

Correlation Coefficient

RB Capital  BRB Banco

Pay attention - limited upside

The 3 months correlation between RBDS11 and BRB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RB Capital Development and BRB Banco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRB Banco and RB Capital 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 RB Capital Development are associated (or correlated) with BRB Banco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRB Banco has no effect on the direction of RB Capital i.e., RB Capital and BRB Banco go up and down completely randomly.

Pair Corralation between RB Capital and BRB Banco

If you would invest  0.00  in RB Capital Development on September 2, 2024 and sell it today you would earn a total of  0.00  from holding RB Capital Development or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

RB Capital Development  vs.  BRB Banco

RB Capital Development

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days RB Capital Development has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong fundamental indicators, RB Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BRB Banco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BRB Banco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Preferred Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with RB Capital and BRB Banco

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

The idea behind RB Capital Development and BRB Banco 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.