Correlation Between RBC Select and CI Global

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Can any of the company-specific risk be diversified away by investing in both RBC Select and CI Global 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 Select and CI Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RBC Select Balanced and CI Global Unconstrained, you can compare the effects of market volatilities on RBC Select and CI Global 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 Select with a short position of CI Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Select and CI Global.

Diversification Opportunities for RBC Select and CI Global

-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between RBC and CUBD is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding RBC Select Balanced and CI Global Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Unconstrained and RBC Select 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 Select Balanced are associated (or correlated) with CI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Unconstrained has no effect on the direction of RBC Select i.e., RBC Select and CI Global go up and down completely randomly.

Pair Corralation between RBC Select and CI Global

Assuming the 90 days trading horizon RBC Select Balanced is expected to generate 1.48 times more return on investment than CI Global. However, RBC Select is 1.48 times more volatile than CI Global Unconstrained. It trades about 0.32 of its potential returns per unit of risk. CI Global Unconstrained is currently generating about 0.08 per unit of risk. If you would invest  3,321  in RBC Select Balanced on September 6, 2024 and sell it today you would earn a total of  226.00  from holding RBC Select Balanced or generate 6.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.41%
ValuesDaily Returns

RBC Select Balanced  vs.  CI Global Unconstrained

 Performance 
       Timeline  
RBC Select Balanced 

Risk-Adjusted Performance

25 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in RBC Select Balanced are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, RBC Select may actually be approaching a critical reversion point that can send shares even higher in January 2025.
CI Global Unconstrained 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Unconstrained are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, CI Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

RBC Select and CI Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with RBC Select and CI Global

The main advantage of trading using opposite RBC Select and CI Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Select position performs unexpectedly, CI Global 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 CI Global will offset losses from the drop in CI Global's long position.
The idea behind RBC Select Balanced and CI Global Unconstrained 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.
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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