Correlation Between Rbc Bluebay and Fidelity Convertible

Can any of the company-specific risk be diversified away by investing in both Rbc Bluebay and Fidelity Convertible 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 Fidelity Convertible 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 Fidelity Vertible Securities, you can compare the effects of market volatilities on Rbc Bluebay and Fidelity Convertible 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 Fidelity Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbc Bluebay and Fidelity Convertible.

Diversification Opportunities for Rbc Bluebay and Fidelity Convertible

-0.33

Correlation Coefficient

Rbc Bluebay  Fidelity Convertible

Very good diversification

The 3 months correlation between Rbc and Fidelity is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Rbc Bluebay Absolute and Fidelity Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Convertible 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 Fidelity Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Convertible has no effect on the direction of Rbc Bluebay i.e., Rbc Bluebay and Fidelity Convertible go up and down completely randomly.

Pair Corralation between Rbc Bluebay and Fidelity Convertible

Assuming the 90 days horizon Rbc Bluebay Absolute is expected to under-perform the Fidelity Convertible. In addition to that, Rbc Bluebay is 2.25 times more volatile than Fidelity Vertible Securities. It trades about -0.18 of its total potential returns per unit of risk. Fidelity Vertible Securities is currently generating about 0.02 per unit of volatility. If you would invest  3,473  in Fidelity Vertible Securities on October 6, 2024 and sell it today you would earn a total of  28.00  from holding Fidelity Vertible Securities or generate 0.81% return on investment over 90 days.

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

Rbc Bluebay Absolute  vs.  Fidelity Vertible Securities

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 weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Fidelity Convertible

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Vertible Securities are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Convertible 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 Bluebay and Fidelity Convertible

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

The idea behind Rbc Bluebay Absolute and Fidelity Vertible Securities 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.