Correlation Between RBC Quant and CI Preferred
Can any of the company-specific risk be diversified away by investing in both RBC Quant and CI Preferred 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 Quant and CI Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RBC Quant Canadian and CI Preferred Share, you can compare the effects of market volatilities on RBC Quant and CI Preferred 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 Quant with a short position of CI Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Quant and CI Preferred.
Diversification Opportunities for RBC Quant and CI Preferred
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RBC and FPR is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding RBC Quant Canadian and CI Preferred Share in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Preferred Share and RBC Quant 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 Quant Canadian are associated (or correlated) with CI Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Preferred Share has no effect on the direction of RBC Quant i.e., RBC Quant and CI Preferred go up and down completely randomly.
Pair Corralation between RBC Quant and CI Preferred
Assuming the 90 days trading horizon RBC Quant Canadian is expected to generate 1.24 times more return on investment than CI Preferred. However, RBC Quant is 1.24 times more volatile than CI Preferred Share. It trades about 0.31 of its potential returns per unit of risk. CI Preferred Share is currently generating about 0.11 per unit of risk. If you would invest 2,898 in RBC Quant Canadian on September 3, 2024 and sell it today you would earn a total of 111.00 from holding RBC Quant Canadian or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Quant Canadian vs. CI Preferred Share
Performance |
| Timeline |
| RBC Quant Canadian |
| CI Preferred Share |
RBC Quant and CI Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Quant and CI Preferred
The main advantage of trading using opposite RBC Quant and CI Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Quant position performs unexpectedly, CI Preferred 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 CI Preferred will offset losses from the drop in CI Preferred's long position.| RBC Quant vs. RBC Quant Dividend | RBC Quant vs. RBC Quant EAFE | RBC Quant vs. Invesco Canadian Dividend | RBC Quant vs. RBC Canadian Preferred |
| CI Preferred vs. BMO Laddered Preferred | CI Preferred vs. iShares SPTSX Canadian | CI Preferred vs. RBC Quant Canadian |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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