Correlation Between Western Asset and Rbc Global
Can any of the company-specific risk be diversified away by investing in both Western Asset and Rbc Global 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 Western Asset and Rbc Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Inflation and Rbc Global Opportunities, you can compare the effects of market volatilities on Western Asset and Rbc Global 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 Western Asset with a short position of Rbc Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Rbc Global.
Diversification Opportunities for Western Asset and Rbc Global
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and RBC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Rbc Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Global Opportunities and Western Asset 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 Western Asset Inflation are associated (or correlated) with Rbc Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Global Opportunities has no effect on the direction of Western Asset i.e., Western Asset and Rbc Global go up and down completely randomly.
Pair Corralation between Western Asset and Rbc Global
Assuming the 90 days horizon Western Asset is expected to generate 4.09 times less return on investment than Rbc Global. But when comparing it to its historical volatility, Western Asset Inflation is 2.06 times less risky than Rbc Global. It trades about 0.15 of its potential returns per unit of risk. Rbc Global Opportunities is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,074 in Rbc Global Opportunities on September 2, 2024 and sell it today you would earn a total of 83.00 from holding Rbc Global Opportunities or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Inflation vs. Rbc Global Opportunities
Performance |
| Timeline |
| Western Asset Inflation |
| Rbc Global Opportunities |
Western Asset and Rbc Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Rbc Global
The main advantage of trading using opposite Western Asset and Rbc Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Rbc Global 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 Global will offset losses from the drop in Rbc Global's long position.| Western Asset vs. Rbc Global Opportunities | Western Asset vs. T Rowe Price | Western Asset vs. Barings Global Floating | Western Asset vs. Wisdomtree Siegel Global |
| Rbc Global vs. Rbc Small Cap | Rbc Global vs. Rbc Enterprise Fund | Rbc Global vs. Rbc Enterprise Fund | Rbc Global vs. Rbc Emerging Markets |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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