Correlation Between 2 RABOBANK and 175 MUNI

Can any of the company-specific risk be diversified away by investing in both 2 RABOBANK and 175 MUNI 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 2 RABOBANK and 175 MUNI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 2 RABOBANK 19 and 175 MUNI FIN, you can compare the effects of market volatilities on 2 RABOBANK and 175 MUNI 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 2 RABOBANK with a short position of 175 MUNI. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2 RABOBANK and 175 MUNI.

Diversification Opportunities for 2 RABOBANK and 175 MUNI

0.0

Correlation Coefficient

2 RABOBANK  175 MUNI

Pay attention - limited upside

The 3 months correlation between RBK12 and 175 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 2 RABOBANK 19 and 175 MUNI FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 175 MUNI FIN and 2 RABOBANK 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 2 RABOBANK 19 are associated (or correlated) with 175 MUNI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 175 MUNI FIN has no effect on the direction of 2 RABOBANK i.e., 2 RABOBANK and 175 MUNI go up and down completely randomly.

Pair Corralation between 2 RABOBANK and 175 MUNI

If you would invest (100.00) in 175 MUNI FIN on October 12, 2024 and sell it today you would earn a total of  100.00  from holding 175 MUNI FIN or generate -100.0% return on investment over 90 days.

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

2 RABOBANK 19  vs.  175 MUNI FIN

2 RABOBANK 19

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 2 RABOBANK 19 has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, 2 RABOBANK is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

175 MUNI FIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 175 MUNI FIN has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, 175 MUNI is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 2 RABOBANK and 175 MUNI

The main advantage of trading using opposite 2 RABOBANK and 175 MUNI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2 RABOBANK position performs unexpectedly, 175 MUNI 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 175 MUNI will offset losses from the drop in 175 MUNI's long position.

The idea behind 2 RABOBANK 19 and 175 MUNI FIN 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.