Correlation Between Wealthsimple Shariah and Rmb Fund
Can any of the company-specific risk be diversified away by investing in both Wealthsimple Shariah and Rmb Fund 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 Wealthsimple Shariah and Rmb Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wealthsimple Shariah World and Rmb Fund A, you can compare the effects of market volatilities on Wealthsimple Shariah and Rmb Fund 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 Wealthsimple Shariah with a short position of Rmb Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wealthsimple Shariah and Rmb Fund.
Diversification Opportunities for Wealthsimple Shariah and Rmb Fund
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wealthsimple and Rmb is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Wealthsimple Shariah World and Rmb Fund A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmb Fund A and Wealthsimple Shariah 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 Wealthsimple Shariah World are associated (or correlated) with Rmb Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmb Fund A has no effect on the direction of Wealthsimple Shariah i.e., Wealthsimple Shariah and Rmb Fund go up and down completely randomly.
Pair Corralation between Wealthsimple Shariah and Rmb Fund
Assuming the 90 days trading horizon Wealthsimple Shariah is expected to generate 1.11 times less return on investment than Rmb Fund. But when comparing it to its historical volatility, Wealthsimple Shariah World is 1.08 times less risky than Rmb Fund. It trades about 0.05 of its potential returns per unit of risk. Rmb Fund A is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,683 in Rmb Fund A on August 27, 2025 and sell it today you would earn a total of 91.00 from holding Rmb Fund A or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Wealthsimple Shariah World vs. Rmb Fund A
Performance |
| Timeline |
| Wealthsimple Shariah |
| Rmb Fund A |
Wealthsimple Shariah and Rmb Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wealthsimple Shariah and Rmb Fund
The main advantage of trading using opposite Wealthsimple Shariah and Rmb Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wealthsimple Shariah position performs unexpectedly, Rmb Fund 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 Rmb Fund will offset losses from the drop in Rmb Fund's long position.| Wealthsimple Shariah vs. Wealthsimple North America | Wealthsimple Shariah vs. Wealthsimple Developed Markets | Wealthsimple Shariah vs. Wealthsimple North American | Wealthsimple Shariah vs. NBI High Yield |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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