Correlation Between RBC Canadian and RBC European
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By analyzing existing cross correlation between RBC Canadian Equity and RBC European Mid Cap, you can compare the effects of market volatilities on RBC Canadian and RBC European 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 Canadian with a short position of RBC European. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Canadian and RBC European.
Diversification Opportunities for RBC Canadian and RBC European
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RBC and RBC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding RBC Canadian Equity and RBC European Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC European Mid and RBC Canadian 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 Canadian Equity are associated (or correlated) with RBC European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC European Mid has no effect on the direction of RBC Canadian i.e., RBC Canadian and RBC European go up and down completely randomly.
Pair Corralation between RBC Canadian and RBC European
Assuming the 90 days trading horizon RBC Canadian Equity is expected to generate 0.87 times more return on investment than RBC European. However, RBC Canadian Equity is 1.15 times less risky than RBC European. It trades about 0.25 of its potential returns per unit of risk. RBC European Mid Cap is currently generating about -0.38 per unit of risk. If you would invest 3,081 in RBC Canadian Equity on August 29, 2024 and sell it today you would earn a total of 95.00 from holding RBC Canadian Equity or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Canadian Equity vs. RBC European Mid Cap
Performance |
| Timeline |
| RBC Canadian Equity |
| RBC European Mid |
RBC Canadian and RBC European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Canadian and RBC European
The main advantage of trading using opposite RBC Canadian and RBC European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Canadian position performs unexpectedly, RBC European 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 European will offset losses from the drop in RBC European's long position.| RBC Canadian vs. Mawer Canadien actions | RBC Canadian vs. PHN Canadian Equity | RBC Canadian vs. BMO Aggregate Bond | RBC Canadian vs. iShares Canadian HYBrid |
| RBC European vs. BMO Aggregate Bond | RBC European vs. iShares Canadian HYBrid | RBC European vs. Brompton European Dividend | RBC European vs. Solar Alliance Energy |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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