Correlation Between Select Fund and Rbb Fund

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

By analyzing existing cross correlation between Select Fund R6 and Rbb Fund , you can compare the effects of market volatilities on Select Fund 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 Select Fund with a short position of Rbb Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Fund and Rbb Fund.

Diversification Opportunities for Select Fund and Rbb Fund

0.86

Correlation Coefficient

Select Fund  Rbb Fund

Very poor diversification

The 3 months correlation between Select and Rbb is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Select Fund R6 and Rbb Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbb Fund and Select 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 Select Fund R6 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 Select Fund i.e., Select Fund and Rbb Fund go up and down completely randomly.

Pair Corralation between Select Fund and Rbb Fund

Assuming the 90 days horizon Select Fund R6 is expected to generate 3.75 times more return on investment than Rbb Fund. However, Select Fund is 3.75 times more volatile than Rbb Fund . It trades about 0.25 of its potential returns per unit of risk. Rbb Fund is currently generating about 0.18 per unit of risk. If you would invest  11,833  in Select Fund R6 on May 2, 2025 and sell it today you would earn a total of  1,798  from holding Select Fund R6 or generate 15.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Select Fund R6  vs.  Rbb Fund

Select Fund R6

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Select Fund R6 are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Select Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Rbb Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rbb Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Rbb Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Select Fund and Rbb Fund

The main advantage of trading using opposite Select Fund and Rbb Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Fund 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 Select Fund R6 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.