Correlation Between RBC Portefeuille and Fidelity Canadian

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

By analyzing existing cross correlation between RBC Portefeuille de and Fidelity Canadian Growth, you can compare the effects of market volatilities on RBC Portefeuille and Fidelity Canadian 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 RBC Portefeuille with a short position of Fidelity Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Portefeuille and Fidelity Canadian.

Diversification Opportunities for RBC Portefeuille and Fidelity Canadian

0.91

Correlation Coefficient

RBC Portefeuille  Fidelity Canadian

Almost no diversification

The 3 months correlation between RBC and Fidelity is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding RBC Portefeuille de and Fidelity Canadian Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canadian Growth and RBC Portefeuille 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 RBC Portefeuille de are associated (or correlated) with Fidelity Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canadian Growth has no effect on the direction of RBC Portefeuille i.e., RBC Portefeuille and Fidelity Canadian go up and down completely randomly.

Pair Corralation between RBC Portefeuille and Fidelity Canadian

Assuming the 90 days trading horizon RBC Portefeuille is expected to generate 2.3 times less return on investment than Fidelity Canadian. But when comparing it to its historical volatility, RBC Portefeuille de is 1.6 times less risky than Fidelity Canadian. It trades about 0.28 of its potential returns per unit of risk. Fidelity Canadian Growth is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  11,563  in Fidelity Canadian Growth on September 12, 2024 and sell it today you would earn a total of  1,933  from holding Fidelity Canadian Growth or generate 16.72% return on investment over 90 days.

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

RBC Portefeuille de  vs.  Fidelity Canadian Growth

RBC Portefeuille

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Portefeuille de are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, RBC Portefeuille may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity Canadian Growth

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Canadian Growth are ranked lower than 31 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, Fidelity Canadian sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RBC Portefeuille and Fidelity Canadian

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

The idea behind RBC Portefeuille de and Fidelity Canadian Growth 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.