Correlation Between Rivernorth Opportunities and Automatic Data

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

By analyzing existing cross correlation between Rivernorth Opportunities and Automatic Data Processing, you can compare the effects of market volatilities on Rivernorth Opportunities and Automatic Data 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 Rivernorth Opportunities with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivernorth Opportunities and Automatic Data.

Diversification Opportunities for Rivernorth Opportunities and Automatic Data

-0.49

Correlation Coefficient

Rivernorth Opportunities  Automatic Data

Very good diversification

The 3 months correlation between Rivernorth and Automatic is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Rivernorth Opportunities and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and Rivernorth Opportunities 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 Rivernorth Opportunities are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Rivernorth Opportunities i.e., Rivernorth Opportunities and Automatic Data go up and down completely randomly.

Pair Corralation between Rivernorth Opportunities and Automatic Data

Considering the 90-day investment horizon Rivernorth Opportunities is expected to generate 0.52 times more return on investment than Automatic Data. However, Rivernorth Opportunities is 1.91 times less risky than Automatic Data. It trades about 0.19 of its potential returns per unit of risk. Automatic Data Processing is currently generating about 0.02 per unit of risk. If you would invest  1,136  in Rivernorth Opportunities on May 5, 2025 and sell it today you would earn a total of  94.00  from holding Rivernorth Opportunities or generate 8.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Rivernorth Opportunities  vs.  Automatic Data Processing

Rivernorth Opportunities

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rivernorth Opportunities are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Rivernorth Opportunities may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Automatic Data Processing

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Automatic Data Processing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Automatic Data is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Rivernorth Opportunities and Automatic Data

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

The idea behind Rivernorth Opportunities and Automatic Data Processing 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.

Check out your portfolio center.

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.