Correlation Between RBC Quant and RBC Quant

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

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

Diversification Opportunities for RBC Quant and RBC Quant

0.27

Correlation Coefficient

RBC Quant  RBC Quant

Modest diversification

The 3 months correlation between RBC and RBC is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding RBC Quant Emerging and RBC Quant Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Quant Dividend and RBC Quant 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 Quant Emerging are associated (or correlated) with RBC Quant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Quant Dividend has no effect on the direction of RBC Quant i.e., RBC Quant and RBC Quant go up and down completely randomly.

Pair Corralation between RBC Quant and RBC Quant

Assuming the 90 days trading horizon RBC Quant is expected to generate 1.79 times less return on investment than RBC Quant. In addition to that, RBC Quant is 1.49 times more volatile than RBC Quant Dividend. It trades about 0.11 of its total potential returns per unit of risk. RBC Quant Dividend is currently generating about 0.3 per unit of volatility. If you would invest  2,304  in RBC Quant Dividend on September 13, 2024 and sell it today you would earn a total of  292.00  from holding RBC Quant Dividend or generate 12.67% return on investment over 90 days.

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

RBC Quant Emerging  vs.  RBC Quant Dividend

RBC Quant Emerging

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Quant Emerging are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, RBC Quant may actually be approaching a critical reversion point that can send shares even higher in January 2025.

RBC Quant Dividend

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Quant Dividend are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, RBC Quant may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with RBC Quant and RBC Quant

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

The idea behind RBC Quant Emerging and RBC Quant Dividend 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.