Correlation Between Rbc Bluebay and Rbc China
Can any of the company-specific risk be diversified away by investing in both Rbc Bluebay and Rbc China 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 Rbc Bluebay and Rbc China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rbc Bluebay Absolute and Rbc China Equity, you can compare the effects of market volatilities on Rbc Bluebay and Rbc China 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 Bluebay with a short position of Rbc China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbc Bluebay and Rbc China.
Diversification Opportunities for Rbc Bluebay and Rbc China
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Rbc and Rbc is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Rbc Bluebay Absolute and Rbc China Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc China Equity and Rbc Bluebay 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 Bluebay Absolute are associated (or correlated) with Rbc China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc China Equity has no effect on the direction of Rbc Bluebay i.e., Rbc Bluebay and Rbc China go up and down completely randomly.
Pair Corralation between Rbc Bluebay and Rbc China
Assuming the 90 days horizon Rbc Bluebay Absolute is expected to under-perform the Rbc China. In addition to that, Rbc Bluebay is 1.01 times more volatile than Rbc China Equity. It trades about -0.12 of its total potential returns per unit of risk. Rbc China Equity is currently generating about -0.12 per unit of volatility. If you would invest 941.00 in Rbc China Equity on August 30, 2024 and sell it today you would lose (52.00) from holding Rbc China Equity or give up 5.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rbc Bluebay Absolute vs. Rbc China Equity
Performance |
| Timeline |
| Rbc Bluebay Absolute |
| Rbc China Equity |
Rbc Bluebay and Rbc China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rbc Bluebay and Rbc China
The main advantage of trading using opposite Rbc Bluebay and Rbc China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rbc Bluebay position performs unexpectedly, Rbc China 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 China will offset losses from the drop in Rbc China's long position.| Rbc Bluebay vs. Matthews China Dividend | Rbc Bluebay vs. Matthews China Fund | Rbc Bluebay vs. Matthews China Small | Rbc Bluebay vs. Aquagold International |
| Rbc China vs. Fisher Fixed Income | Rbc China vs. Ms Global Fixed | Rbc China vs. Touchstone International Equity | Rbc China vs. Gmo Global Equity |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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