Correlation Between Edgepoint Global and RBC Global

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

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

Diversification Opportunities for Edgepoint Global and RBC Global

0.7

Correlation Coefficient

Edgepoint Global  RBC Global

Poor diversification

The 3 months correlation between Edgepoint and RBC is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Edgepoint Global Portfolio and RBC Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Global Technology and Edgepoint Global 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 Edgepoint Global Portfolio are associated (or correlated) with RBC Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Global Technology has no effect on the direction of Edgepoint Global i.e., Edgepoint Global and RBC Global go up and down completely randomly.

Pair Corralation between Edgepoint Global and RBC Global

Assuming the 90 days trading horizon Edgepoint Global Portfolio is expected to under-perform the RBC Global. But the fund apears to be less risky and, when comparing its historical volatility, Edgepoint Global Portfolio is 1.62 times less risky than RBC Global. The fund trades about -0.42 of its potential returns per unit of risk. The RBC Global Technology is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  2,325  in RBC Global Technology on September 25, 2024 and sell it today you would earn a total of  128.00  from holding RBC Global Technology or generate 5.51% return on investment over 90 days.

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

Edgepoint Global Portfolio  vs.  RBC Global Technology

Edgepoint Global Por

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Edgepoint Global Portfolio has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong forward indicators, Edgepoint Global is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

RBC Global Technology

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Global Technology are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, RBC Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Edgepoint Global and RBC Global

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

The idea behind Edgepoint Global Portfolio and RBC Global Technology 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.