Correlation Between RBC European and RBC Global
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By analyzing existing cross correlation between RBC European Mid Cap and RBC Global Technology, you can compare the effects of market volatilities on RBC European and RBC Global 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 European with a short position of RBC Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC European and RBC Global.
Diversification Opportunities for RBC European and RBC Global
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RBC and RBC is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding RBC European Mid Cap and RBC Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Global Technology and RBC European 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 European Mid Cap are associated (or correlated) with RBC Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Global Technology has no effect on the direction of RBC European i.e., RBC European and RBC Global go up and down completely randomly.
Pair Corralation between RBC European and RBC Global
Assuming the 90 days trading horizon RBC European Mid Cap is expected to under-perform the RBC Global. But the fund apears to be less risky and, when comparing its historical volatility, RBC European Mid Cap is 1.91 times less risky than RBC Global. The fund trades about -0.38 of its potential returns per unit of risk. The RBC Global Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,697 in RBC Global Technology on August 29, 2024 and sell it today you would earn a total of 45.00 from holding RBC Global Technology or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC European Mid Cap vs. RBC Global Technology
Performance |
| Timeline |
| RBC European Mid |
| RBC Global Technology |
RBC European and RBC Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC European and RBC Global
The main advantage of trading using opposite RBC European and RBC Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC European position performs unexpectedly, RBC Global 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 Global will offset losses from the drop in RBC Global's long position.| RBC European vs. BMO Aggregate Bond | RBC European vs. iShares Canadian HYBrid | RBC European vs. Brompton European Dividend | RBC European vs. Solar Alliance Energy |
| RBC Global vs. CI Signature Cat | RBC Global vs. CI Global Alpha | RBC Global vs. Fidelity Technology Innovators | RBC Global vs. CI Global Health |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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