Correlation Between RBC Global and CI Black

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

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

Diversification Opportunities for RBC Global and CI Black

0.61

Correlation Coefficient

RBC Global  CI Black

Poor diversification

The 3 months correlation between RBC and 0P0000752C is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding RBC Global Equity and CI Black Creek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Black Creek and RBC Global 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 Global Equity are associated (or correlated) with CI Black. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Black Creek has no effect on the direction of RBC Global i.e., RBC Global and CI Black go up and down completely randomly.

Pair Corralation between RBC Global and CI Black

Assuming the 90 days trading horizon RBC Global Equity is expected to generate 1.11 times more return on investment than CI Black. However, RBC Global is 1.11 times more volatile than CI Black Creek. It trades about 0.05 of its potential returns per unit of risk. CI Black Creek is currently generating about 0.02 per unit of risk. If you would invest  2,128  in RBC Global Equity on October 11, 2024 and sell it today you would earn a total of  417.00  from holding RBC Global Equity or generate 19.6% return on investment over 90 days.

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

RBC Global Equity  vs.  CI Black Creek

RBC Global Equity

Risk-Adjusted Performance

0 of 100

Very Weak

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

CI Black Creek

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CI Black Creek has generated negative risk-adjusted returns adding no value to fund investors. Despite latest unfluctuating performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with RBC Global and CI Black

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

The idea behind RBC Global Equity and CI Black Creek 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..