Correlation Between RBC Portefeuille and Guardian Investment

Can any of the company-specific risk be diversified away by investing in both RBC Portefeuille and Guardian Investment 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 Portefeuille and Guardian Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RBC Portefeuille de and Guardian Investment Grade, you can compare the effects of market volatilities on RBC Portefeuille and Guardian Investment 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 Portefeuille with a short position of Guardian Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Portefeuille and Guardian Investment.

Diversification Opportunities for RBC Portefeuille and Guardian Investment

0.1

Correlation Coefficient

RBC Portefeuille  Guardian Investment

Average diversification

The 3 months correlation between RBC and Guardian is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding RBC Portefeuille de and Guardian Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Investment Grade and RBC Portefeuille 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 Portefeuille de are associated (or correlated) with Guardian Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Investment Grade has no effect on the direction of RBC Portefeuille i.e., RBC Portefeuille and Guardian Investment go up and down completely randomly.

Pair Corralation between RBC Portefeuille and Guardian Investment

Assuming the 90 days trading horizon RBC Portefeuille is expected to generate 266.75 times less return on investment than Guardian Investment. But when comparing it to its historical volatility, RBC Portefeuille de is 2.61 times less risky than Guardian Investment. It trades about 0.0 of its potential returns per unit of risk. Guardian Investment Grade is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,166  in Guardian Investment Grade on December 24, 2024 and sell it today you would earn a total of  280.00  from holding Guardian Investment Grade or generate 12.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

RBC Portefeuille de  vs.  Guardian Investment Grade

RBC Portefeuille

Risk-Adjusted Performance

Very Weak

Over the last 90 days RBC Portefeuille de has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, RBC Portefeuille is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guardian Investment Grade

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Investment Grade are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak basic indicators, Guardian Investment displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RBC Portefeuille and Guardian Investment

The main advantage of trading using opposite RBC Portefeuille and Guardian Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Portefeuille position performs unexpectedly, Guardian Investment 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 Guardian Investment will offset losses from the drop in Guardian Investment's long position.

The idea behind RBC Portefeuille de and Guardian Investment Grade pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.