Correlation Between RBC Dactions and RBC Sciences

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

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

Diversification Opportunities for RBC Dactions and RBC Sciences

-0.4

Correlation Coefficient

RBC Dactions  RBC Sciences

Very good diversification

The 3 months correlation between RBC and RBC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding RBC dactions mondiales and RBC sciences biologiques in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC sciences biologiques and RBC Dactions 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 dactions mondiales are associated (or correlated) with RBC Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC sciences biologiques has no effect on the direction of RBC Dactions i.e., RBC Dactions and RBC Sciences go up and down completely randomly.

Pair Corralation between RBC Dactions and RBC Sciences

Assuming the 90 days trading horizon RBC dactions mondiales is expected to under-perform the RBC Sciences. In addition to that, RBC Dactions is 1.84 times more volatile than RBC sciences biologiques. It trades about -0.12 of its total potential returns per unit of risk. RBC sciences biologiques is currently generating about 0.03 per unit of volatility. If you would invest  5,366  in RBC sciences biologiques on November 29, 2024 and sell it today you would earn a total of  68.00  from holding RBC sciences biologiques or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

RBC dactions mondiales  vs.  RBC sciences biologiques

RBC dactions mondiales

Risk-Adjusted Performance

Very Weak

Over the last 90 days RBC dactions mondiales has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

RBC sciences biologiques

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in RBC sciences biologiques are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, RBC Sciences is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with RBC Dactions and RBC Sciences

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

The idea behind RBC dactions mondiales and RBC sciences biologiques 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.