Correlation Between RBB Fund and Zacks Small-cap

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

By analyzing existing cross correlation between The RBB Fund and Zacks Small Cap E, you can compare the effects of market volatilities on RBB Fund and Zacks Small-cap 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 RBB Fund with a short position of Zacks Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBB Fund and Zacks Small-cap.

Diversification Opportunities for RBB Fund and Zacks Small-cap

0.35

Correlation Coefficient

RBB Fund  Zacks Small-cap

Weak diversification

The 3 months correlation between RBB and Zacks is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding The RBB Fund and Zacks Small Cap E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zacks Small Cap and RBB 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 The RBB Fund are associated (or correlated) with Zacks Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zacks Small Cap has no effect on the direction of RBB Fund i.e., RBB Fund and Zacks Small-cap go up and down completely randomly.

Pair Corralation between RBB Fund and Zacks Small-cap

Given the investment horizon of 90 days The RBB Fund is expected to generate 0.26 times more return on investment than Zacks Small-cap. However, The RBB Fund is 3.82 times less risky than Zacks Small-cap. It trades about -0.06 of its potential returns per unit of risk. Zacks Small Cap E is currently generating about -0.04 per unit of risk. If you would invest  2,662  in The RBB Fund on August 22, 2025 and sell it today you would lose (31.00) from holding The RBB Fund or give up 1.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

The RBB Fund  vs.  Zacks Small Cap E

RBB Fund

Risk-Adjusted Performance

Weakest

Over the last 90 days The RBB Fund has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, RBB Fund is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Zacks Small Cap

Risk-Adjusted Performance

Weakest

Over the last 90 days Zacks Small Cap E has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Zacks Small-cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with RBB Fund and Zacks Small-cap

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

The idea behind The RBB Fund and Zacks Small Cap E 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.