Correlation Between Sit Small and Rbb Fund

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

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

Diversification Opportunities for Sit Small and Rbb Fund

0.59

Correlation Coefficient

Sit Small  Rbb Fund

Very weak diversification

The 3 months correlation between Sit and Rbb is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sit Small Cap and Rbb Fund Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbb Fund Trust and Sit Small 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 Sit Small Cap are associated (or correlated) with Rbb Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbb Fund Trust has no effect on the direction of Sit Small i.e., Sit Small and Rbb Fund go up and down completely randomly.

Pair Corralation between Sit Small and Rbb Fund

Assuming the 90 days horizon Sit Small Cap is expected to under-perform the Rbb Fund. In addition to that, Sit Small is 2.4 times more volatile than Rbb Fund Trust. It trades about -0.25 of its total potential returns per unit of risk. Rbb Fund Trust is currently generating about 0.1 per unit of volatility. If you would invest  1,088  in Rbb Fund Trust on October 10, 2024 and sell it today you would earn a total of  14.00  from holding Rbb Fund Trust or generate 1.29% return on investment over 90 days.

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

Sit Small Cap  vs.  Rbb Fund Trust

Sit Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sit Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Sit Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rbb Fund Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbb Fund Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Sit Small and Rbb Fund

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

The idea behind Sit Small Cap and Rbb Fund Trust 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.