Correlation Between LIFE CAPITAL and RBRM11

Can any of the company-specific risk be diversified away by investing in both LIFE CAPITAL and RBRM11 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 LIFE CAPITAL and RBRM11 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LIFE CAPITAL PARTNERS and RBRM11, you can compare the effects of market volatilities on LIFE CAPITAL and RBRM11 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 LIFE CAPITAL with a short position of RBRM11. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFE CAPITAL and RBRM11.

Diversification Opportunities for LIFE CAPITAL and RBRM11

0.0

Correlation Coefficient

LIFE CAPITAL  RBRM11

Pay attention - limited upside

The 3 months correlation between LIFE and RBRM11 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LIFE CAPITAL PARTNERS and RBRM11 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBRM11 and LIFE CAPITAL 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 LIFE CAPITAL PARTNERS are associated (or correlated) with RBRM11. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBRM11 has no effect on the direction of LIFE CAPITAL i.e., LIFE CAPITAL and RBRM11 go up and down completely randomly.

Pair Corralation between LIFE CAPITAL and RBRM11

If you would invest  988.00  in LIFE CAPITAL PARTNERS on February 29, 2024 and sell it today you would earn a total of  4.00  from holding LIFE CAPITAL PARTNERS or generate 0.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

LIFE CAPITAL PARTNERS  vs.  RBRM11

LIFE CAPITAL PARTNERS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LIFE CAPITAL PARTNERS has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, LIFE CAPITAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

RBRM11

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RBRM11 has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, RBRM11 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LIFE CAPITAL and RBRM11

The main advantage of trading using opposite LIFE CAPITAL and RBRM11 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFE CAPITAL position performs unexpectedly, RBRM11 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 RBRM11 will offset losses from the drop in RBRM11's long position.

The idea behind LIFE CAPITAL PARTNERS and RBRM11 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.