Correlation Between Rmb Fund and Short-intermediate
Can any of the company-specific risk be diversified away by investing in both Rmb Fund and Short-intermediate 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 Rmb Fund and Short-intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rmb Fund I and Short Intermediate Bond Fund, you can compare the effects of market volatilities on Rmb Fund and Short-intermediate 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 Rmb Fund with a short position of Short-intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rmb Fund and Short-intermediate.
Diversification Opportunities for Rmb Fund and Short-intermediate
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RMB and Short-intermediate is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Rmb Fund I and Short Intermediate Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Intermediate Bond and Rmb 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 Rmb Fund I are associated (or correlated) with Short-intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Intermediate Bond has no effect on the direction of Rmb Fund i.e., Rmb Fund and Short-intermediate go up and down completely randomly.
Pair Corralation between Rmb Fund and Short-intermediate
Assuming the 90 days horizon Rmb Fund I is expected to generate 5.6 times more return on investment than Short-intermediate. However, Rmb Fund is 5.6 times more volatile than Short Intermediate Bond Fund. It trades about 0.05 of its potential returns per unit of risk. Short Intermediate Bond Fund is currently generating about 0.13 per unit of risk. If you would invest 3,092 in Rmb Fund I on August 30, 2024 and sell it today you would earn a total of 741.00 from holding Rmb Fund I or generate 23.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rmb Fund I vs. Short Intermediate Bond Fund
Performance |
| Timeline |
| Rmb Fund I |
| Short Intermediate Bond |
Rmb Fund and Short-intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rmb Fund and Short-intermediate
The main advantage of trading using opposite Rmb Fund and Short-intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rmb Fund position performs unexpectedly, Short-intermediate 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 Short-intermediate will offset losses from the drop in Short-intermediate's long position.| Rmb Fund vs. Growth Fund Of | Rmb Fund vs. HUMANA INC | Rmb Fund vs. Aquagold International | Rmb Fund vs. Barloworld Ltd ADR |
| Short-intermediate vs. Calvert Global Energy | Short-intermediate vs. Energy Services Fund | Short-intermediate vs. Icon Natural Resources | Short-intermediate vs. Dreyfus Natural Resources |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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