Correlation Between Mawer Equity and RBC Sciences

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

By analyzing existing cross correlation between Mawer Equity A and RBC sciences biologiques, you can compare the effects of market volatilities on Mawer Equity and RBC Sciences 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 Mawer Equity with a short position of RBC Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mawer Equity and RBC Sciences.

Diversification Opportunities for Mawer Equity and RBC Sciences

0.91

Correlation Coefficient

Mawer Equity  RBC Sciences

Almost no diversification

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

Pair Corralation between Mawer Equity and RBC Sciences

Assuming the 90 days trading horizon Mawer Equity A is expected to generate 0.73 times more return on investment than RBC Sciences. However, Mawer Equity A is 1.38 times less risky than RBC Sciences. It trades about 0.32 of its potential returns per unit of risk. RBC sciences biologiques is currently generating about 0.2 per unit of risk. If you would invest  9,892  in Mawer Equity A on September 4, 2024 and sell it today you would earn a total of  490.00  from holding Mawer Equity A or generate 4.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

Mawer Equity A  vs.  RBC sciences biologiques

Mawer Equity A

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mawer Equity A are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, Mawer Equity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

RBC sciences biologiques

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RBC sciences biologiques are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, RBC Sciences may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mawer Equity and RBC Sciences

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

The idea behind Mawer Equity A and RBC sciences biologiques 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.