Correlation Between US Global and Rbb Fund

Can any of the company-specific risk be diversified away by investing in both US Global and Rbb Fund 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 US Global and Rbb Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US Global Sea and Rbb Fund , you can compare the effects of market volatilities on US Global and Rbb Fund 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 US Global with a short position of Rbb Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and Rbb Fund.

Diversification Opportunities for US Global and Rbb Fund

-0.64

Correlation Coefficient

US Global  Rbb Fund

Excellent diversification

The 3 months correlation between SEA and Rbb is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding US Global Sea and Rbb Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbb Fund and US Global 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 US Global Sea are associated (or correlated) with Rbb Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbb Fund has no effect on the direction of US Global i.e., US Global and Rbb Fund go up and down completely randomly.

Pair Corralation between US Global and Rbb Fund

Considering the 90-day investment horizon US Global Sea is expected to generate 1.15 times more return on investment than Rbb Fund. However, US Global is 1.15 times more volatile than Rbb Fund . It trades about 0.21 of its potential returns per unit of risk. Rbb Fund is currently generating about -0.16 per unit of risk. If you would invest  1,484  in US Global Sea on January 26, 2024 and sell it today you would earn a total of  60.00  from holding US Global Sea or generate 4.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

US Global Sea  vs.  Rbb Fund

US Global Sea

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US Global Sea has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, US Global is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Rbb Fund

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rbb Fund are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Rbb Fund is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with US Global and Rbb Fund

The main advantage of trading using opposite US Global and Rbb Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global position performs unexpectedly, Rbb Fund 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 Rbb Fund will offset losses from the drop in Rbb Fund's long position.

The idea behind US Global Sea and Rbb Fund 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.