Correlation Between Vanguard FTSE and RBC Quant
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE 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 Vanguard FTSE and RBC Quant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Canadian and RBC Quant Canadian, you can compare the effects of market volatilities on Vanguard FTSE 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 Vanguard FTSE with a short position of RBC Quant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and RBC Quant.
Diversification Opportunities for Vanguard FTSE and RBC Quant
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and RBC is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Canadian and RBC Quant Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Quant Canadian and Vanguard FTSE 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 Vanguard FTSE 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 Canadian has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and RBC Quant go up and down completely randomly.
Pair Corralation between Vanguard FTSE and RBC Quant
Assuming the 90 days trading horizon Vanguard FTSE Canadian is expected to generate 0.82 times more return on investment than RBC Quant. However, Vanguard FTSE Canadian is 1.22 times less risky than RBC Quant. It trades about 0.43 of its potential returns per unit of risk. RBC Quant Canadian is currently generating about 0.3 per unit of risk. If you would invest 4,855 in Vanguard FTSE Canadian on September 1, 2024 and sell it today you would earn a total of 218.00 from holding Vanguard FTSE Canadian or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Vanguard FTSE Canadian vs. RBC Quant Canadian
Performance |
| Timeline |
| Vanguard FTSE Canadian |
| RBC Quant Canadian |
Vanguard FTSE and RBC Quant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and RBC Quant
The main advantage of trading using opposite Vanguard FTSE and RBC Quant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE 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.| Vanguard FTSE vs. iShares SPTSX Composite | Vanguard FTSE vs. Vanguard FTSE Canadian | Vanguard FTSE vs. Vanguard SP 500 | Vanguard FTSE vs. iShares Core SPTSX |
| RBC Quant vs. RBC Quant Dividend | RBC Quant vs. RBC Quant EAFE | RBC Quant vs. Invesco Canadian Dividend | RBC Quant vs. RBC Canadian Preferred |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |