Correlation Between RBC Canadian and RBC Discount
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By analyzing existing cross correlation between RBC Canadian Equity and RBC Discount Bond, you can compare the effects of market volatilities on RBC Canadian and RBC Discount 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 Discount. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Canadian and RBC Discount.
Diversification Opportunities for RBC Canadian and RBC Discount
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RBC and RBC is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding RBC Canadian Equity and RBC Discount Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Discount Bond 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 Discount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Discount Bond has no effect on the direction of RBC Canadian i.e., RBC Canadian and RBC Discount go up and down completely randomly.
Pair Corralation between RBC Canadian and RBC Discount
Assuming the 90 days trading horizon RBC Canadian is expected to generate 1.22 times less return on investment than RBC Discount. In addition to that, RBC Canadian is 1.42 times more volatile than RBC Discount Bond. It trades about 0.09 of its total potential returns per unit of risk. RBC Discount Bond is currently generating about 0.15 per unit of volatility. If you would invest 2,193 in RBC Discount Bond on October 21, 2024 and sell it today you would earn a total of 21.00 from holding RBC Discount Bond or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
RBC Canadian Equity vs. RBC Discount Bond
Performance |
| Timeline |
| RBC Canadian Equity |
| RBC Discount Bond |
RBC Canadian and RBC Discount Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Canadian and RBC Discount
The main advantage of trading using opposite RBC Canadian and RBC Discount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Canadian position performs unexpectedly, RBC Discount 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 Discount will offset losses from the drop in RBC Discount's long position.| RBC Canadian vs. TD Dividend Growth | RBC Canadian vs. iShares Canadian HYBrid | RBC Canadian vs. Altagas Cum Red | RBC Canadian vs. European Residential Real |
| RBC Discount vs. RBC Target 2029 | RBC Discount vs. RBC Quant Dividend | RBC Discount vs. RBC Quant EAFE | RBC Discount vs. RBC Quant European |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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