Correlation Between Rbc Bluebay and Citizensselect Funds

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

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

Diversification Opportunities for Rbc Bluebay and Citizensselect Funds

-0.25

Correlation Coefficient

Rbc Bluebay  Citizensselect Funds

Very good diversification

The 3 months correlation between Rbc and Citizensselect is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Rbc Bluebay Absolute and Citizensselect Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizensselect Funds and Rbc Bluebay 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 Bluebay Absolute are associated (or correlated) with Citizensselect Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizensselect Funds has no effect on the direction of Rbc Bluebay i.e., Rbc Bluebay and Citizensselect Funds go up and down completely randomly.

Pair Corralation between Rbc Bluebay and Citizensselect Funds

Assuming the 90 days horizon Rbc Bluebay Absolute is expected to under-perform the Citizensselect Funds. In addition to that, Rbc Bluebay is 1.56 times more volatile than Citizensselect Funds . It trades about -0.02 of its total potential returns per unit of risk. Citizensselect Funds is currently generating about 0.02 per unit of volatility. If you would invest  91.00  in Citizensselect Funds on October 15, 2024 and sell it today you would earn a total of  9.00  from holding Citizensselect Funds or generate 9.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.21%
Values	Daily Returns

Rbc Bluebay Absolute  vs.  Citizensselect Funds

Rbc Bluebay Absolute

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbc Bluebay Absolute has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak 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.

Citizensselect Funds

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citizensselect Funds are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Citizensselect Funds is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rbc Bluebay and Citizensselect Funds

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

The idea behind Rbc Bluebay Absolute and Citizensselect Funds 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.