Correlation Between Basic Materials and Rice Hall
Can any of the company-specific risk be diversified away by investing in both Basic Materials and Rice Hall 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 Basic Materials and Rice Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basic Materials Fund and Rice Hall James, you can compare the effects of market volatilities on Basic Materials and Rice Hall 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 Basic Materials with a short position of Rice Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Materials and Rice Hall.
Diversification Opportunities for Basic Materials and Rice Hall
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Basic and Rice is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Basic Materials Fund and Rice Hall James in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rice Hall James and Basic Materials 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 Basic Materials Fund are associated (or correlated) with Rice Hall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rice Hall James has no effect on the direction of Basic Materials i.e., Basic Materials and Rice Hall go up and down completely randomly.
Pair Corralation between Basic Materials and Rice Hall
Assuming the 90 days horizon Basic Materials Fund is expected to generate 0.27 times more return on investment than Rice Hall. However, Basic Materials Fund is 3.65 times less risky than Rice Hall. It trades about 0.17 of its potential returns per unit of risk. Rice Hall James is currently generating about -0.06 per unit of risk. If you would invest 4,766 in Basic Materials Fund on October 9, 2025 and sell it today you would earn a total of 1,817 from holding Basic Materials Fund or generate 38.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.77% |
| Values | Daily Returns |
Basic Materials Fund vs. Rice Hall James
Performance |
| Timeline |
| Basic Materials |
| Rice Hall James |
Risk-Adjusted Performance
Weakest
Weak | Strong |
Basic Materials and Rice Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basic Materials and Rice Hall
The main advantage of trading using opposite Basic Materials and Rice Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Materials position performs unexpectedly, Rice Hall 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 Rice Hall will offset losses from the drop in Rice Hall's long position.| Basic Materials vs. Barrett Growth Fund | Basic Materials vs. James Micro Cap | Basic Materials vs. Guinness Atkinson China | Basic Materials vs. Shelton Emerging Markets |
| Rice Hall vs. Small Pany Growth | Rice Hall vs. Small Pany Growth | Rice Hall vs. Small Pany Value | Rice Hall vs. Small Pany Value |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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