Correlation Between RBC Sciences and Mawer Equity

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

By analyzing existing cross correlation between RBC sciences biologiques and Mawer Equity A, you can compare the effects of market volatilities on RBC Sciences and Mawer Equity 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 Sciences with a short position of Mawer Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Sciences and Mawer Equity.

Diversification Opportunities for RBC Sciences and Mawer Equity

0.91

Correlation Coefficient

RBC Sciences  Mawer Equity

Almost no diversification

The 3 months correlation between RBC and Mawer is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding RBC sciences biologiques and Mawer Equity A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawer Equity A and RBC Sciences 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 sciences biologiques are associated (or correlated) with Mawer Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mawer Equity A has no effect on the direction of RBC Sciences i.e., RBC Sciences and Mawer Equity go up and down completely randomly.

Pair Corralation between RBC Sciences and Mawer Equity

Assuming the 90 days trading horizon RBC sciences biologiques is expected to generate 1.51 times more return on investment than Mawer Equity. However, RBC Sciences is 1.51 times more volatile than Mawer Equity A. It trades about 0.2 of its potential returns per unit of risk. Mawer Equity A is currently generating about 0.2 per unit of risk. If you would invest  4,956  in RBC sciences biologiques on September 12, 2024 and sell it today you would earn a total of  598.00  from holding RBC sciences biologiques or generate 12.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

RBC sciences biologiques  vs.  Mawer Equity A

RBC sciences biologiques

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in RBC sciences biologiques are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, RBC Sciences may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mawer Equity A

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mawer Equity A are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Mawer Equity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with RBC Sciences and Mawer Equity

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

The idea behind RBC sciences biologiques and Mawer Equity A 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.