Correlation Between Regional Bank and Multi-index 2035

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Can any of the company-specific risk be diversified away by investing in both Regional Bank and Multi-index 2035 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 Regional Bank and Multi-index 2035 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Bank Fund and Multi Index 2035 Lifetime, you can compare the effects of market volatilities on Regional Bank and Multi-index 2035 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 Regional Bank with a short position of Multi-index 2035. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Bank and Multi-index 2035.

Diversification Opportunities for Regional Bank and Multi-index 2035

RegionalMulti-indexDiversified AwayRegionalMulti-indexDiversified Away100%
0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Regional and Multi-index is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Regional Bank Fund and Multi Index 2035 Lifetime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Index 2035 and Regional Bank 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 Regional Bank Fund are associated (or correlated) with Multi-index 2035. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Index 2035 has no effect on the direction of Regional Bank i.e., Regional Bank and Multi-index 2035 go up and down completely randomly.

Pair Corralation between Regional Bank and Multi-index 2035

Assuming the 90 days horizon Regional Bank Fund is expected to under-perform the Multi-index 2035. In addition to that, Regional Bank is 2.52 times more volatile than Multi Index 2035 Lifetime. It trades about -0.04 of its total potential returns per unit of risk. Multi Index 2035 Lifetime is currently generating about 0.16 per unit of volatility. If you would invest  1,325  in Multi Index 2035 Lifetime on November 23, 2024 and sell it today you would earn a total of  20.00  from holding Multi Index 2035 Lifetime or generate 1.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

Regional Bank Fund  vs.  Multi Index 2035 Lifetime

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50
JavaScript chart by amCharts 3.21.15FRBCX JRTMX
       Timeline  
Regional Bank 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Regional Bank Fund 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 fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb26272829303132
Multi Index 2035 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Multi Index 2035 Lifetime are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Multi-index 2035 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb12.812.91313.113.213.313.4

Regional Bank and Multi-index 2035 Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.51-1.92-1.33-0.74-0.150.40.971.542.112.68 0.20.40.60.81.01.2
JavaScript chart by amCharts 3.21.15FRBCX JRTMX
       Returns  

Pair Trading with Regional Bank and Multi-index 2035

The main advantage of trading using opposite Regional Bank and Multi-index 2035 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Bank position performs unexpectedly, Multi-index 2035 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 Multi-index 2035 will offset losses from the drop in Multi-index 2035's long position.
The idea behind Regional Bank Fund and Multi Index 2035 Lifetime 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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