Correlation Between RBC Quant and RBC Quant

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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 Dividend, 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

RBCRBCDiversified AwayRBCRBCDiversified Away100%
0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between RBC and RBC is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding RBC Quant Canadian and RBC Quant Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Quant Dividend 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 Dividend 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 is expected to generate 1.73 times less return on investment than RBC Quant. But when comparing it to its historical volatility, RBC Quant Canadian is 1.17 times less risky than RBC Quant. It trades about 0.06 of its potential returns per unit of risk. RBC Quant Dividend is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,745  in RBC Quant Dividend on November 30, 2024 and sell it today you would earn a total of  792.00  from holding RBC Quant Dividend or generate 45.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

RBC Quant Canadian  vs.  RBC Quant Dividend

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50
JavaScript chart by amCharts 3.21.15RCD RUD
       Timeline  
RBC Quant Canadian 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days RBC Quant Canadian has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2829303132
RBC Quant Dividend 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days RBC Quant Dividend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2526272829

RBC Quant and RBC Quant Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.01-1.54-1.07-0.6-0.130.270.741.211.682.15 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15RCD RUD
       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.
The idea behind RBC Quant Canadian and RBC Quant Dividend pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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