Correlation Between RBC European and European Residential
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By analyzing existing cross correlation between RBC European Mid Cap and European Residential Real, you can compare the effects of market volatilities on RBC European and European Residential 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 European Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC European and European Residential.
Diversification Opportunities for RBC European and European Residential
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RBC and European is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding RBC European Mid Cap and European Residential Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Residential Real 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 European Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Residential Real has no effect on the direction of RBC European i.e., RBC European and European Residential go up and down completely randomly.
Pair Corralation between RBC European and European Residential
Assuming the 90 days trading horizon RBC European is expected to generate 5.72 times less return on investment than European Residential. But when comparing it to its historical volatility, RBC European Mid Cap is 2.45 times less risky than European Residential. It trades about 0.03 of its potential returns per unit of risk. European Residential Real is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 240.00 in European Residential Real on August 29, 2024 and sell it today you would earn a total of 127.00 from holding European Residential Real or generate 52.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
RBC European Mid Cap vs. European Residential Real
Performance |
| Timeline |
| RBC European Mid |
| European Residential Real |
RBC European and European Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC European and European Residential
The main advantage of trading using opposite RBC European and European Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC European position performs unexpectedly, European Residential 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 European Residential will offset losses from the drop in European Residential'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 |
| European Residential vs. BSR Real Estate | European Residential vs. Minto Apartment Real | European Residential vs. Nexus Real Estate | European Residential vs. Morguard North American |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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