Correlation Between Rreef Property and Small-cap Value

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

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

Diversification Opportunities for Rreef Property and Small-cap Value

0.09

Correlation Coefficient

Rreef Property  Small-cap Value

Significant diversification

The 3 months correlation between Rreef and Small-cap is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Rreef Property Trust and Small Cap Value Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Value and Rreef Property 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 Rreef Property Trust are associated (or correlated) with Small-cap Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Value has no effect on the direction of Rreef Property i.e., Rreef Property and Small-cap Value go up and down completely randomly.

Pair Corralation between Rreef Property and Small-cap Value

Assuming the 90 days trading horizon Rreef Property is expected to generate 18.79 times less return on investment than Small-cap Value. But when comparing it to its historical volatility, Rreef Property Trust is 5.64 times less risky than Small-cap Value. It trades about 0.05 of its potential returns per unit of risk. Small Cap Value Profund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  9,676  in Small Cap Value Profund on May 28, 2025 and sell it today you would earn a total of  1,316  from holding Small Cap Value Profund or generate 13.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Rreef Property Trust  vs.  Small Cap Value Profund

Rreef Property Trust

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Rreef Property Trust are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Rreef Property is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Small Cap Value

Risk-Adjusted Performance

Good

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

Pair Trading with Rreef Property and Small-cap Value

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

The idea behind Rreef Property Trust and Small Cap Value Profund 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.