Correlation Between Rivernorth Opportunistic and IShares Intl

Can any of the company-specific risk be diversified away by investing in both Rivernorth Opportunistic and IShares Intl 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 Rivernorth Opportunistic and IShares Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rivernorth Opportunistic Municipalome and iShares Intl High, you can compare the effects of market volatilities on Rivernorth Opportunistic and IShares Intl 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 Rivernorth Opportunistic with a short position of IShares Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivernorth Opportunistic and IShares Intl.

Diversification Opportunities for Rivernorth Opportunistic and IShares Intl

0.5

Correlation Coefficient

Rivernorth Opportunistic  IShares Intl

Very weak diversification

The 3 months correlation between Rivernorth and IShares is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Rivernorth Opportunistic Munic and iShares Intl High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Intl High and Rivernorth Opportunistic 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 Rivernorth Opportunistic Municipalome are associated (or correlated) with IShares Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Intl High has no effect on the direction of Rivernorth Opportunistic i.e., Rivernorth Opportunistic and IShares Intl go up and down completely randomly.

Pair Corralation between Rivernorth Opportunistic and IShares Intl

Considering the 90-day investment horizon Rivernorth Opportunistic Municipalome is expected to under-perform the IShares Intl. In addition to that, Rivernorth Opportunistic is 2.03 times more volatile than iShares Intl High. It trades about -0.02 of its total potential returns per unit of risk. iShares Intl High is currently generating about -0.02 per unit of volatility. If you would invest  4,477  in iShares Intl High on September 14, 2024 and sell it today you would lose (17.00) from holding iShares Intl High or give up 0.38% of portfolio value over 90 days.

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

Rivernorth Opportunistic Munic  vs.  iShares Intl High

Rivernorth Opportunistic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rivernorth Opportunistic Municipalome has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong primary indicators, Rivernorth Opportunistic is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

iShares Intl High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Intl High has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, IShares Intl is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Rivernorth Opportunistic and IShares Intl

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

The idea behind Rivernorth Opportunistic Municipalome and iShares Intl High 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.