Correlation Between PHN Canadian and RBC Canadian
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By analyzing existing cross correlation between PHN Canadian Equity and RBC Canadian Equity, you can compare the effects of market volatilities on PHN Canadian and RBC Canadian 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 PHN Canadian with a short position of RBC Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHN Canadian and RBC Canadian.
Diversification Opportunities for PHN Canadian and RBC Canadian
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between PHN and RBC is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding PHN Canadian Equity and RBC Canadian Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Canadian Equity and PHN 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 PHN Canadian Equity are associated (or correlated) with RBC Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Canadian Equity has no effect on the direction of PHN Canadian i.e., PHN Canadian and RBC Canadian go up and down completely randomly.
Pair Corralation between PHN Canadian and RBC Canadian
Assuming the 90 days trading horizon PHN Canadian Equity is expected to generate 1.03 times more return on investment than RBC Canadian. However, PHN Canadian is 1.03 times more volatile than RBC Canadian Equity. It trades about 0.14 of its potential returns per unit of risk. RBC Canadian Equity is currently generating about 0.11 per unit of risk. If you would invest 2,188 in PHN Canadian Equity on August 25, 2024 and sell it today you would earn a total of 44.00 from holding PHN Canadian Equity or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PHN Canadian Equity vs. RBC Canadian Equity
Performance |
| Timeline |
| PHN Canadian Equity |
| RBC Canadian Equity |
PHN Canadian and RBC Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PHN Canadian and RBC Canadian
The main advantage of trading using opposite PHN Canadian and RBC Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHN Canadian position performs unexpectedly, RBC Canadian 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 Canadian will offset losses from the drop in RBC Canadian's long position.| PHN Canadian vs. RBC Canadian Equity | PHN Canadian vs. BMO Aggregate Bond | PHN Canadian vs. iShares Canadian HYBrid | PHN Canadian vs. Brompton European Dividend |
| RBC Canadian vs. PHN Canadian Equity | RBC Canadian vs. BMO Aggregate Bond | RBC Canadian vs. iShares Canadian HYBrid | RBC Canadian vs. Brompton European Dividend |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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