Correlation Between China Fund and RiverNorthDoubleLine
Can any of the company-specific risk be diversified away by investing in both China Fund and RiverNorthDoubleLine 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 China Fund and RiverNorthDoubleLine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Fund and RiverNorthDoubleLine Strategic Opportunity, you can compare the effects of market volatilities on China Fund and RiverNorthDoubleLine 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 China Fund with a short position of RiverNorthDoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Fund and RiverNorthDoubleLine.
Diversification Opportunities for China Fund and RiverNorthDoubleLine
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and RiverNorthDoubleLine is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding China Fund and RiverNorthDoubleLine Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorthDoubleLine and China Fund 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 China Fund are associated (or correlated) with RiverNorthDoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorthDoubleLine has no effect on the direction of China Fund i.e., China Fund and RiverNorthDoubleLine go up and down completely randomly.
Pair Corralation between China Fund and RiverNorthDoubleLine
Considering the 90-day investment horizon China Fund is expected to generate 5.02 times more return on investment than RiverNorthDoubleLine. However, China Fund is 5.02 times more volatile than RiverNorthDoubleLine Strategic Opportunity. It trades about -0.01 of its potential returns per unit of risk. RiverNorthDoubleLine Strategic Opportunity is currently generating about -0.18 per unit of risk. If you would invest 1,189 in China Fund on August 28, 2024 and sell it today you would lose (34.00) from holding China Fund or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Fund vs. RiverNorthDoubleLine Strategic
Performance |
| Timeline |
| China Fund |
| RiverNorthDoubleLine |
China Fund and RiverNorthDoubleLine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Fund and RiverNorthDoubleLine
The main advantage of trading using opposite China Fund and RiverNorthDoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Fund position performs unexpectedly, RiverNorthDoubleLine 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 RiverNorthDoubleLine will offset losses from the drop in RiverNorthDoubleLine's long position.| China Fund vs. Ashmore Group Plc | China Fund vs. Mexico Equity And | China Fund vs. Western Asset Managed | China Fund vs. Blackrock Muniholdings Quality |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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