Correlation Between Invesco RAFI and RBC Quant
Can any of the company-specific risk be diversified away by investing in both Invesco RAFI 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 Invesco RAFI and RBC Quant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco RAFI Index and RBC Quant European, you can compare the effects of market volatilities on Invesco RAFI 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 Invesco RAFI with a short position of RBC Quant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco RAFI and RBC Quant.
Diversification Opportunities for Invesco RAFI and RBC Quant
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and RBC is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Invesco RAFI Index and RBC Quant European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Quant European and Invesco RAFI 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 Invesco RAFI Index 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 European has no effect on the direction of Invesco RAFI i.e., Invesco RAFI and RBC Quant go up and down completely randomly.
Pair Corralation between Invesco RAFI and RBC Quant
Assuming the 90 days trading horizon Invesco RAFI is expected to generate 2.03 times less return on investment than RBC Quant. In addition to that, Invesco RAFI is 1.08 times more volatile than RBC Quant European. It trades about 0.13 of its total potential returns per unit of risk. RBC Quant European is currently generating about 0.29 per unit of volatility. If you would invest 3,280 in RBC Quant European on November 17, 2025 and sell it today you would earn a total of 415.00 from holding RBC Quant European or generate 12.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco RAFI Index vs. RBC Quant European
Performance |
| Timeline |
| Invesco RAFI Index |
| RBC Quant European |
Invesco RAFI and RBC Quant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco RAFI and RBC Quant
The main advantage of trading using opposite Invesco RAFI and RBC Quant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco RAFI position performs unexpectedly, RBC Quant 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 Quant will offset losses from the drop in RBC Quant's long position.| Invesco RAFI vs. Brompton Global Healthcare | Invesco RAFI vs. iShares MSCI USA | Invesco RAFI vs. Accelerate Absolute Return | Invesco RAFI vs. iShares MSCI Min |
| RBC Quant vs. Brompton European Dividend | RBC Quant vs. Mackenzie International Equity | RBC Quant vs. RBC Quant European | RBC Quant vs. iShares MSCI Min |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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