Correlation Between Rbc China and Rbc Funds
Can any of the company-specific risk be diversified away by investing in both Rbc China and Rbc Funds 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 China and Rbc Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rbc China Equity and Rbc Funds Trust, you can compare the effects of market volatilities on Rbc China and Rbc Funds 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 China with a short position of Rbc Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbc China and Rbc Funds.
Diversification Opportunities for Rbc China and Rbc Funds
Very good diversification
The 3 months correlation between Rbc and Rbc is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Rbc China Equity and Rbc Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Funds Trust and Rbc China 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 China Equity are associated (or correlated) with Rbc Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Funds Trust has no effect on the direction of Rbc China i.e., Rbc China and Rbc Funds go up and down completely randomly.
Pair Corralation between Rbc China and Rbc Funds
Assuming the 90 days horizon Rbc China Equity is expected to generate 10.23 times more return on investment than Rbc Funds. However, Rbc China is 10.23 times more volatile than Rbc Funds Trust. It trades about 0.03 of its potential returns per unit of risk. Rbc Funds Trust is currently generating about 0.19 per unit of risk. If you would invest 798.00 in Rbc China Equity on September 25, 2024 and sell it today you would earn a total of 62.00 from holding Rbc China Equity or generate 7.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Rbc China Equity vs. Rbc Funds Trust
Performance |
Timeline |
Rbc China Equity |
Rbc Funds Trust |
Rbc China and Rbc Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rbc China and Rbc Funds
The main advantage of trading using opposite Rbc China and Rbc Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rbc China position performs unexpectedly, Rbc Funds 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 Funds will offset losses from the drop in Rbc Funds' long position.Rbc China vs. Rbc Small Cap | Rbc China vs. Rbc Enterprise Fund | Rbc China vs. Rbc Enterprise Fund | Rbc China vs. Rbc Emerging Markets |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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