Correlation Between RBC Quant and RBC Quant
Can any of the company-specific risk be diversified away by investing in both RBC Quant 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 RBC Quant and RBC Quant 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 RBC Quant EAFE, you can compare the effects of market volatilities on RBC Quant 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 RBC Quant with a short position of RBC Quant. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Quant and RBC Quant.
Diversification Opportunities for RBC Quant and RBC Quant
Modest diversification
The 3 months correlation between RBC and RBC is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding RBC Quant Canadian and RBC Quant EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Quant EAFE 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 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 EAFE has no effect on the direction of RBC Quant i.e., RBC Quant and RBC Quant go up and down completely randomly.
Pair Corralation between RBC Quant and RBC Quant
Assuming the 90 days trading horizon RBC Quant Canadian is expected to generate 0.87 times more return on investment than RBC Quant. However, RBC Quant Canadian is 1.15 times less risky than RBC Quant. It trades about 0.18 of its potential returns per unit of risk. RBC Quant EAFE is currently generating about -0.05 per unit of risk. If you would invest 2,778 in RBC Quant Canadian on August 29, 2024 and sell it today you would earn a total of 191.00 from holding RBC Quant Canadian or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Quant Canadian vs. RBC Quant EAFE
Performance |
| Timeline |
| RBC Quant Canadian |
| RBC Quant EAFE |
RBC Quant and RBC Quant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Quant and RBC Quant
The main advantage of trading using opposite RBC Quant and RBC Quant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Quant 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.| RBC Quant vs. iShares SPTSX Canadian | RBC Quant vs. iShares Canadian Select | RBC Quant vs. BMO Canadian High | RBC Quant vs. BMO Aggregate Bond |
| RBC Quant vs. RBC Quant Dividend | RBC Quant vs. RBC Quant European | RBC Quant vs. RBC Quant EAFE | RBC Quant vs. RBC PHN Short |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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