Correlation Between Russell Investments and Russell Investments

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

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

Diversification Opportunities for Russell Investments and Russell Investments

0.47

Correlation Coefficient

Russell Investments  Russell Investments

Very weak diversification

The 3 months correlation between Russell and Russell is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Russell Investments Global and Russell Investments Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Russell Investments Real and Russell Investments 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 Russell Investments Global are associated (or correlated) with Russell Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Russell Investments Real has no effect on the direction of Russell Investments i.e., Russell Investments and Russell Investments go up and down completely randomly.

Pair Corralation between Russell Investments and Russell Investments

Assuming the 90 days trading horizon Russell Investments is expected to generate 1.2 times less return on investment than Russell Investments. But when comparing it to its historical volatility, Russell Investments Global is 1.06 times less risky than Russell Investments. It trades about 0.15 of its potential returns per unit of risk. Russell Investments Real is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,682  in Russell Investments Real on April 22, 2025 and sell it today you would earn a total of  119.00  from holding Russell Investments Real or generate 7.07% return on investment over 90 days.

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

Russell Investments Global  vs.  Russell Investments Real

Russell Investments

Risk-Adjusted Performance

Good

Over the last 90 days Russell Investments Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Russell Investments is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Russell Investments Real

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Russell Investments Real are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Russell Investments may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Russell Investments and Russell Investments

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

The idea behind Russell Investments Global and Russell Investments Real 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 Global Correlations module to find global opportunities by holding instruments from different markets.