Correlation Between Rbc Funds and Rbc Bluebay

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

By analyzing existing cross correlation between Rbc Funds Trust and Rbc Bluebay Core, you can compare the effects of market volatilities on Rbc Funds and Rbc Bluebay 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 Funds with a short position of Rbc Bluebay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbc Funds and Rbc Bluebay.

Diversification Opportunities for Rbc Funds and Rbc Bluebay

-0.55

Correlation Coefficient

Rbc Funds  Rbc Bluebay

Excellent diversification

The 3 months correlation between Rbc and Rbc is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Rbc Funds Trust and Rbc Bluebay Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Bluebay Core and Rbc Funds 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 Funds Trust are associated (or correlated) with Rbc Bluebay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Bluebay Core has no effect on the direction of Rbc Funds i.e., Rbc Funds and Rbc Bluebay go up and down completely randomly.

Pair Corralation between Rbc Funds and Rbc Bluebay

Assuming the 90 days horizon Rbc Funds Trust is expected to generate 0.73 times more return on investment than Rbc Bluebay. However, Rbc Funds Trust is 1.37 times less risky than Rbc Bluebay. It trades about 0.13 of its potential returns per unit of risk. Rbc Bluebay Core is currently generating about 0.01 per unit of risk. If you would invest  993.00  in Rbc Funds Trust on August 31, 2024 and sell it today you would earn a total of  20.00  from holding Rbc Funds Trust or generate 2.01% return on investment over 90 days.

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

Rbc Funds Trust  vs.  Rbc Bluebay Core

Rbc Funds Trust

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rbc Funds Trust are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Rbc Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rbc Bluebay Core

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbc Bluebay Core has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Rbc Bluebay is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rbc Funds and Rbc Bluebay

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

The idea behind Rbc Funds Trust and Rbc Bluebay Core 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.