Correlation Between Riversource Series and Rbc Small

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

By analyzing existing cross correlation between Riversource Series Trust and Rbc Small Cap, you can compare the effects of market volatilities on Riversource Series and Rbc Small 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 Riversource Series with a short position of Rbc Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Riversource Series and Rbc Small.

Diversification Opportunities for Riversource Series and Rbc Small

0.7

Correlation Coefficient

Riversource Series  Rbc Small

Poor diversification

The 3 months correlation between Riversource and Rbc is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Riversource Series Trust and Rbc Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Small Cap and Riversource Series 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 Riversource Series Trust are associated (or correlated) with Rbc Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Small Cap has no effect on the direction of Riversource Series i.e., Riversource Series and Rbc Small go up and down completely randomly.

Pair Corralation between Riversource Series and Rbc Small

Assuming the 90 days horizon Riversource Series Trust is expected to generate 0.9 times more return on investment than Rbc Small. However, Riversource Series Trust is 1.12 times less risky than Rbc Small. It trades about 0.12 of its potential returns per unit of risk. Rbc Small Cap is currently generating about 0.01 per unit of risk. If you would invest  985.00  in Riversource Series Trust on May 11, 2025 and sell it today you would earn a total of  70.00  from holding Riversource Series Trust or generate 7.11% return on investment over 90 days.

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

Riversource Series Trust  vs.  Rbc Small Cap

Riversource Series Trust

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Riversource Series Trust are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Riversource Series may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Rbc Small Cap

Risk-Adjusted Performance

Weakest

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

Pair Trading with Riversource Series and Rbc Small

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

The idea behind Riversource Series Trust and Rbc Small Cap 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.