Correlation Between Rainier International and General Money
Can any of the company-specific risk be diversified away by investing in both Rainier International and General Money 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 Rainier International and General Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rainier International Discovery and General Money Market, you can compare the effects of market volatilities on Rainier International and General Money 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 Rainier International with a short position of General Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rainier International and General Money.
Diversification Opportunities for Rainier International and General Money
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rainier and General is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Rainier International Discover and General Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Money Market and Rainier International 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 Rainier International Discovery are associated (or correlated) with General Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Money Market has no effect on the direction of Rainier International i.e., Rainier International and General Money go up and down completely randomly.
Pair Corralation between Rainier International and General Money
Assuming the 90 days horizon Rainier International Discovery is expected to generate 3.49 times more return on investment than General Money. However, Rainier International is 3.49 times more volatile than General Money Market. It trades about 0.02 of its potential returns per unit of risk. General Money Market is currently generating about 0.08 per unit of risk. If you would invest 2,270 in Rainier International Discovery on September 12, 2024 and sell it today you would earn a total of 137.00 from holding Rainier International Discovery or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.88% |
| Values | Daily Returns |
Rainier International Discover vs. General Money Market
Performance |
| Timeline |
| Rainier International |
| General Money Market |
Rainier International and General Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rainier International and General Money
The main advantage of trading using opposite Rainier International and General Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rainier International position performs unexpectedly, General Money 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 General Money will offset losses from the drop in General Money's long position.| Rainier International vs. General Money Market | Rainier International vs. Putnam Money Market | Rainier International vs. Dws Government Money | Rainier International vs. Prudential Government Money |
| General Money vs. T Rowe Price | General Money vs. Multisector Bond Sma | General Money vs. Ambrus Core Bond | General Money vs. Blrc Sgy Mnp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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