Correlation Between Rmb Mendon and Yorktown Small

Can any of the company-specific risk be diversified away by investing in both Rmb Mendon and Yorktown Small 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 Rmb Mendon and Yorktown Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rmb Mendon Financial and Yorktown Small Cap Fund, you can compare the effects of market volatilities on Rmb Mendon and Yorktown Small 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 Rmb Mendon with a short position of Yorktown Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rmb Mendon and Yorktown Small.

Diversification Opportunities for Rmb Mendon and Yorktown Small

0.91

Correlation Coefficient

Rmb Mendon  Yorktown Small

Almost no diversification

The 3 months correlation between Rmb and Yorktown is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Rmb Mendon Financial and Yorktown Small Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yorktown Small Cap and Rmb Mendon 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 Rmb Mendon Financial are associated (or correlated) with Yorktown Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yorktown Small Cap has no effect on the direction of Rmb Mendon i.e., Rmb Mendon and Yorktown Small go up and down completely randomly.

Pair Corralation between Rmb Mendon and Yorktown Small

Assuming the 90 days horizon Rmb Mendon Financial is expected to under-perform the Yorktown Small. In addition to that, Rmb Mendon is 1.15 times more volatile than Yorktown Small Cap Fund. It trades about -0.31 of its total potential returns per unit of risk. Yorktown Small Cap Fund is currently generating about -0.24 per unit of volatility. If you would invest  1,703  in Yorktown Small Cap Fund on October 10, 2024 and sell it today you would lose (101.00) from holding Yorktown Small Cap Fund or give up 5.93% of portfolio value over 90 days.

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

Rmb Mendon Financial  vs.  Yorktown Small Cap Fund

Rmb Mendon Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rmb Mendon Financial are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Rmb Mendon may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Yorktown Small Cap

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yorktown Small Cap Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Yorktown Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rmb Mendon and Yorktown Small

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

The idea behind Rmb Mendon Financial and Yorktown Small Cap 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.