Correlation Between Parametric Commodity and Rbc Bluebay

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

By analyzing existing cross correlation between Parametric Modity Strategy and Rbc Bluebay Global, you can compare the effects of market volatilities on Parametric Commodity and Rbc Bluebay 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 Parametric Commodity with a short position of Rbc Bluebay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parametric Commodity and Rbc Bluebay.

Diversification Opportunities for Parametric Commodity and Rbc Bluebay

0.67

Correlation Coefficient

Parametric Commodity  Rbc Bluebay

Poor diversification

The 3 months correlation between Parametric and Rbc is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Parametric Modity Strategy and Rbc Bluebay Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Bluebay Global and Parametric Commodity 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 Parametric Modity Strategy are associated (or correlated) with Rbc Bluebay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Bluebay Global has no effect on the direction of Parametric Commodity i.e., Parametric Commodity and Rbc Bluebay go up and down completely randomly.

Pair Corralation between Parametric Commodity and Rbc Bluebay

Assuming the 90 days horizon Parametric Modity Strategy is expected to generate 7.49 times more return on investment than Rbc Bluebay. However, Parametric Commodity is 7.49 times more volatile than Rbc Bluebay Global. It trades about 0.08 of its potential returns per unit of risk. Rbc Bluebay Global is currently generating about 0.22 per unit of risk. If you would invest  622.00  in Parametric Modity Strategy on August 30, 2024 and sell it today you would earn a total of  24.00  from holding Parametric Modity Strategy or generate 3.86% return on investment over 90 days.

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

Parametric Modity Strategy  vs.  Rbc Bluebay Global

Parametric Commodity

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Parametric Modity Strategy are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Parametric Commodity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rbc Bluebay Global

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rbc Bluebay Global are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Rbc Bluebay is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Parametric Commodity and Rbc Bluebay

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

The idea behind Parametric Modity Strategy and Rbc Bluebay Global 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.