Correlation Between PHN Multi and RBC Select
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By analyzing existing cross correlation between PHN Multi Style All Cap and RBC Select Balanced, you can compare the effects of market volatilities on PHN Multi and RBC Select 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 Multi with a short position of RBC Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHN Multi and RBC Select.
Diversification Opportunities for PHN Multi and RBC Select
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PHN and RBC is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding PHN Multi Style All Cap and RBC Select Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Select Balanced and PHN Multi 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 Multi Style All Cap are associated (or correlated) with RBC Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Select Balanced has no effect on the direction of PHN Multi i.e., PHN Multi and RBC Select go up and down completely randomly.
Pair Corralation between PHN Multi and RBC Select
Assuming the 90 days trading horizon PHN Multi Style All Cap is expected to generate 1.8 times more return on investment than RBC Select. However, PHN Multi is 1.8 times more volatile than RBC Select Balanced. It trades about 0.1 of its potential returns per unit of risk. RBC Select Balanced is currently generating about 0.07 per unit of risk. If you would invest 1,971 in PHN Multi Style All Cap on August 25, 2024 and sell it today you would earn a total of 837.00 from holding PHN Multi Style All Cap or generate 42.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PHN Multi Style All Cap vs. RBC Select Balanced
Performance |
| Timeline |
| PHN Multi Style |
| RBC Select Balanced |
PHN Multi and RBC Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PHN Multi and RBC Select
The main advantage of trading using opposite PHN Multi and RBC Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHN Multi position performs unexpectedly, RBC Select 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 Select will offset losses from the drop in RBC Select's long position.The idea behind PHN Multi Style All Cap and RBC Select Balanced 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.| RBC Select vs. TD Comfort Balanced | RBC Select vs. Mawer Balanced | RBC Select vs. BMO Aggregate Bond | RBC Select vs. iShares Canadian HYBrid |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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