Correlation Between Reynolds Blue and Paradigm Select

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

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

Diversification Opportunities for Reynolds Blue and Paradigm Select

-0.24

Correlation Coefficient

Reynolds Blue  Paradigm Select

Very good diversification

The 3 months correlation between Reynolds and Paradigm is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Reynolds Blue Chip and Paradigm Select Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paradigm Select and Reynolds Blue 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 Reynolds Blue Chip are associated (or correlated) with Paradigm Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paradigm Select has no effect on the direction of Reynolds Blue i.e., Reynolds Blue and Paradigm Select go up and down completely randomly.

Pair Corralation between Reynolds Blue and Paradigm Select

Assuming the 90 days horizon Reynolds Blue Chip is expected to under-perform the Paradigm Select. In addition to that, Reynolds Blue is 1.37 times more volatile than Paradigm Select Fund. It trades about -0.11 of its total potential returns per unit of risk. Paradigm Select Fund is currently generating about 0.17 per unit of volatility. If you would invest  8,117  in Paradigm Select Fund on September 13, 2025 and sell it today you would earn a total of  1,303  from holding Paradigm Select Fund or generate 16.05% return on investment over 90 days.

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

Reynolds Blue Chip  vs.  Paradigm Select Fund

Reynolds Blue Chip

Risk-Adjusted Performance

Weakest

Over the last 90 days Reynolds Blue Chip has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long term up-swing for the fund investors.

Paradigm Select

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Paradigm Select Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Paradigm Select showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Reynolds Blue and Paradigm Select

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

The idea behind Reynolds Blue Chip and Paradigm Select 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.