Correlation Between Rbc Small and Access Capital

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

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

Diversification Opportunities for Rbc Small and Access Capital

0.19

Correlation Coefficient

Rbc Small  Access Capital

Average diversification

The 3 months correlation between Rbc and Access is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Rbc Small Cap and Access Capital Munity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Access Capital Munity and Rbc 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 Rbc Small Cap are associated (or correlated) with Access Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Access Capital Munity has no effect on the direction of Rbc Small i.e., Rbc Small and Access Capital go up and down completely randomly.

Pair Corralation between Rbc Small and Access Capital

Assuming the 90 days horizon Rbc Small Cap is expected to under-perform the Access Capital. In addition to that, Rbc Small is 15.63 times more volatile than Access Capital Munity. It trades about -0.29 of its total potential returns per unit of risk. Access Capital Munity is currently generating about -0.33 per unit of volatility. If you would invest  765.00  in Access Capital Munity on September 28, 2024 and sell it today you would lose (13.00) from holding Access Capital Munity or give up 1.7% of portfolio value over 90 days.

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

Rbc Small Cap  vs.  Access Capital Munity

Rbc Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbc Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Access Capital Munity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Rbc Small and Access Capital

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

The idea behind Rbc Small Cap and Access Capital Munity 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.