Correlation Between RBC Quant and IShares Core
Can any of the company-specific risk be diversified away by investing in both RBC Quant and IShares Core 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 Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RBC Quant EAFE and iShares Core MSCI, you can compare the effects of market volatilities on RBC Quant and IShares Core 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 Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Quant and IShares Core.
Diversification Opportunities for RBC Quant and IShares Core
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between RBC and IShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding RBC Quant EAFE and iShares Core MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core MSCI 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 EAFE are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core MSCI has no effect on the direction of RBC Quant i.e., RBC Quant and IShares Core go up and down completely randomly.
Pair Corralation between RBC Quant and IShares Core
Assuming the 90 days trading horizon RBC Quant EAFE is expected to generate 0.97 times more return on investment than IShares Core. However, RBC Quant EAFE is 1.03 times less risky than IShares Core. It trades about 0.05 of its potential returns per unit of risk. iShares Core MSCI is currently generating about 0.04 per unit of risk. If you would invest 2,442 in RBC Quant EAFE on August 25, 2024 and sell it today you would earn a total of 135.00 from holding RBC Quant EAFE or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Quant EAFE vs. iShares Core MSCI
Performance |
| Timeline |
| RBC Quant EAFE |
| iShares Core MSCI |
RBC Quant and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Quant and IShares Core
The main advantage of trading using opposite RBC Quant and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Quant position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| RBC Quant vs. iShares Core MSCI | RBC Quant vs. Vanguard FTSE Developed | RBC Quant vs. iShares MSCI EAFE | RBC Quant vs. iShares Core MSCI |
| IShares Core vs. Vanguard FTSE Developed | IShares Core vs. iShares MSCI EAFE | IShares Core vs. iShares Core MSCI | IShares Core vs. BMO MSCI EAFE |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |