Correlation Between RBC Discount and CDSPI Petite
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By analyzing existing cross correlation between RBC Discount Bond and CDSPI petite cap, you can compare the effects of market volatilities on RBC Discount and CDSPI Petite 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 Discount with a short position of CDSPI Petite. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Discount and CDSPI Petite.
Diversification Opportunities for RBC Discount and CDSPI Petite
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RBC and CDSPI is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding RBC Discount Bond and CDSPI petite cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDSPI petite cap and RBC Discount 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 Discount Bond are associated (or correlated) with CDSPI Petite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDSPI petite cap has no effect on the direction of RBC Discount i.e., RBC Discount and CDSPI Petite go up and down completely randomly.
Pair Corralation between RBC Discount and CDSPI Petite
Assuming the 90 days trading horizon RBC Discount is expected to generate 10.79 times less return on investment than CDSPI Petite. But when comparing it to its historical volatility, RBC Discount Bond is 2.24 times less risky than CDSPI Petite. It trades about 0.04 of its potential returns per unit of risk. CDSPI petite cap is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 7,152 in CDSPI petite cap on November 7, 2024 and sell it today you would earn a total of 332.00 from holding CDSPI petite cap or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Discount Bond vs. CDSPI petite cap
Performance |
| Timeline |
| RBC Discount Bond |
| CDSPI petite cap |
RBC Discount and CDSPI Petite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Discount and CDSPI Petite
The main advantage of trading using opposite RBC Discount and CDSPI Petite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Discount position performs unexpectedly, CDSPI Petite 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 CDSPI Petite will offset losses from the drop in CDSPI Petite's long position.| RBC Discount vs. RBC Target 2029 | RBC Discount vs. RBC Quant Dividend | RBC Discount vs. RBC Quant EAFE | RBC Discount vs. RBC Quant European |
| CDSPI Petite vs. BMO Aggregate Bond | CDSPI Petite vs. iShares Canadian HYBrid | CDSPI Petite vs. Brompton European Dividend | CDSPI Petite vs. Solar Alliance Energy |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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