Correlation Between SPTSX Dividend and RBC Banks
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By analyzing existing cross correlation between SPTSX Dividend Aristocrats and RBC Banks Yield, you can compare the effects of market volatilities on SPTSX Dividend and RBC Banks 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 SPTSX Dividend with a short position of RBC Banks. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPTSX Dividend and RBC Banks.
Diversification Opportunities for SPTSX Dividend and RBC Banks
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPTSX and RBC is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and RBC Banks Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Banks Yield and SPTSX Dividend 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 SPTSX Dividend Aristocrats are associated (or correlated) with RBC Banks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Banks Yield has no effect on the direction of SPTSX Dividend i.e., SPTSX Dividend and RBC Banks go up and down completely randomly.
Pair Corralation between SPTSX Dividend and RBC Banks
Assuming the 90 days trading horizon SPTSX Dividend is expected to generate 2.37 times less return on investment than RBC Banks. But when comparing it to its historical volatility, SPTSX Dividend Aristocrats is 2.65 times less risky than RBC Banks. It trades about 0.15 of its potential returns per unit of risk. RBC Banks Yield is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,658 in RBC Banks Yield on August 29, 2024 and sell it today you would earn a total of 1,056 from holding RBC Banks Yield or generate 63.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
SPTSX Dividend Aristocrats vs. RBC Banks Yield
Performance |
| Timeline |
SPTSX Dividend and RBC Banks Volatility Contrast
Predicted Return Density |
| Returns |
SPTSX Dividend Aristocrats
Pair trading matchups for SPTSX Dividend
RBC Banks Yield
Pair trading matchups for RBC Banks
Pair Trading with SPTSX Dividend and RBC Banks
The main advantage of trading using opposite SPTSX Dividend and RBC Banks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend position performs unexpectedly, RBC Banks 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 Banks will offset losses from the drop in RBC Banks' long position.| SPTSX Dividend vs. Thunderbird Entertainment Group | SPTSX Dividend vs. Firan Technology Group | SPTSX Dividend vs. Computer Modelling Group | SPTSX Dividend vs. Northstar Clean Technologies |
| RBC Banks vs. RBC Banks Yield | RBC Banks vs. RBC Canadian Preferred | RBC Banks vs. RBC Quant Canadian | RBC Banks vs. RBC Quant 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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