Correlation Between RBC Discount and Bewhere Holdings
Can any of the company-specific risk be diversified away by investing in both RBC Discount and Bewhere Holdings 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 Discount and Bewhere Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RBC Discount Bond and Bewhere Holdings, you can compare the effects of market volatilities on RBC Discount and Bewhere Holdings 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 Bewhere Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Discount and Bewhere Holdings.
Diversification Opportunities for RBC Discount and Bewhere Holdings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RBC and Bewhere is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding RBC Discount Bond and Bewhere Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bewhere Holdings 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 Bewhere Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bewhere Holdings has no effect on the direction of RBC Discount i.e., RBC Discount and Bewhere Holdings go up and down completely randomly.
Pair Corralation between RBC Discount and Bewhere Holdings
Assuming the 90 days trading horizon RBC Discount is expected to generate 14.41 times less return on investment than Bewhere Holdings. But when comparing it to its historical volatility, RBC Discount Bond is 13.53 times less risky than Bewhere Holdings. It trades about 0.11 of its potential returns per unit of risk. Bewhere Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Bewhere Holdings on August 26, 2024 and sell it today you would earn a total of 57.00 from holding Bewhere Holdings or generate 285.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Discount Bond vs. Bewhere Holdings
Performance |
| Timeline |
| RBC Discount Bond |
| Bewhere Holdings |
RBC Discount and Bewhere Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Discount and Bewhere Holdings
The main advantage of trading using opposite RBC Discount and Bewhere Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Discount position performs unexpectedly, Bewhere Holdings 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 Bewhere Holdings will offset losses from the drop in Bewhere Holdings' long position.| RBC Discount vs. Franklin Global Aggregate | RBC Discount vs. CI Enhanced Government | RBC Discount vs. CIBC Core Plus | RBC Discount vs. Mackenzie Core Plus |
| Bewhere Holdings vs. Current Water Technologies | Bewhere Holdings vs. Sparta Capital | Bewhere Holdings vs. Fintech Select | Bewhere Holdings vs. iShares Canadian HYBrid |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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