Correlation Between First Trust and RBC Quant
Can any of the company-specific risk be diversified away by investing in both First Trust and RBC Quant at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining First Trust and RBC Quant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Morningstar and RBC Quant Canadian, you can compare the effects of market volatilities on First Trust and RBC Quant 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 First Trust with a short position of RBC Quant. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and RBC Quant.
Diversification Opportunities for First Trust and RBC Quant
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and RBC is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Morningstar and RBC Quant Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Quant Canadian and First Trust 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 First Trust Morningstar are associated (or correlated) with RBC Quant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Quant Canadian has no effect on the direction of First Trust i.e., First Trust and RBC Quant go up and down completely randomly.
Pair Corralation between First Trust and RBC Quant
Assuming the 90 days trading horizon First Trust is expected to generate 1.4 times less return on investment than RBC Quant. In addition to that, First Trust is 1.05 times more volatile than RBC Quant Canadian. It trades about 0.16 of its total potential returns per unit of risk. RBC Quant Canadian is currently generating about 0.24 per unit of volatility. If you would invest 3,554 in RBC Quant Canadian on October 24, 2025 and sell it today you would earn a total of 345.00 from holding RBC Quant Canadian or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Morningstar vs. RBC Quant Canadian
Performance |
| Timeline |