Correlation Between RBC Quant and IShares SPTSX
Can any of the company-specific risk be diversified away by investing in both RBC Quant and IShares SPTSX 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 IShares SPTSX 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 iShares SPTSX North, you can compare the effects of market volatilities on RBC Quant and IShares SPTSX 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 IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Quant and IShares SPTSX.
Diversification Opportunities for RBC Quant and IShares SPTSX
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RBC and IShares is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding RBC Quant Canadian and iShares SPTSX North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX North 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 IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX North has no effect on the direction of RBC Quant i.e., RBC Quant and IShares SPTSX go up and down completely randomly.
Pair Corralation between RBC Quant and IShares SPTSX
Assuming the 90 days trading horizon RBC Quant Canadian is expected to generate 1.14 times more return on investment than IShares SPTSX. However, RBC Quant is 1.14 times more volatile than iShares SPTSX North. It trades about 0.1 of its potential returns per unit of risk. iShares SPTSX North is currently generating about 0.07 per unit of risk. If you would invest 2,224 in RBC Quant Canadian on September 4, 2024 and sell it today you would earn a total of 786.00 from holding RBC Quant Canadian or generate 35.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Quant Canadian vs. iShares SPTSX North
Performance |
| Timeline |
| RBC Quant Canadian |
| iShares SPTSX North |
RBC Quant and IShares SPTSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Quant and IShares SPTSX
The main advantage of trading using opposite RBC Quant and IShares SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Quant position performs unexpectedly, IShares SPTSX 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 IShares SPTSX will offset losses from the drop in IShares SPTSX'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 |
| IShares SPTSX vs. iShares IG Corporate | IShares SPTSX vs. iShares Canadian HYBrid | IShares SPTSX vs. iShares JP Morgan | IShares SPTSX vs. iShares Floating Rate |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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