Correlation Between Rivernorth Opportunities and Vanguard Russell

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

By analyzing existing cross correlation between Rivernorth Opportunities and Vanguard Russell 2000, you can compare the effects of market volatilities on Rivernorth Opportunities and Vanguard Russell 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 Vanguard Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rivernorth Opportunities and Vanguard Russell.

Diversification Opportunities for Rivernorth Opportunities and Vanguard Russell

0.95

Correlation Coefficient

Rivernorth Opportunities  Vanguard Russell

Almost no diversification

The 3 months correlation between Rivernorth and Vanguard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Rivernorth Opportunities and Vanguard Russell 2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Russell 2000 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 Vanguard Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Russell 2000 has no effect on the direction of Rivernorth Opportunities i.e., Rivernorth Opportunities and Vanguard Russell go up and down completely randomly.

Pair Corralation between Rivernorth Opportunities and Vanguard Russell

Considering the 90-day investment horizon Rivernorth Opportunities is expected to generate 1.11 times less return on investment than Vanguard Russell. But when comparing it to its historical volatility, Rivernorth Opportunities is 1.66 times less risky than Vanguard Russell. It trades about 0.2 of its potential returns per unit of risk. Vanguard Russell 2000 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  30,350  in Vanguard Russell 2000 on May 6, 2025 and sell it today you would earn a total of  2,930  from holding Vanguard Russell 2000 or generate 9.65% return on investment over 90 days.

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

Rivernorth Opportunities  vs.  Vanguard Russell 2000

Rivernorth Opportunities

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rivernorth Opportunities are ranked lower than 15 (%) 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.

Vanguard Russell 2000

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Russell 2000 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward indicators, Vanguard Russell may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Rivernorth Opportunities and Vanguard Russell

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

The idea behind Rivernorth Opportunities and Vanguard Russell 2000 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.