Correlation Between Rbc Funds and Nasdaq-100 Index

Can any of the company-specific risk be diversified away by investing in both Rbc Funds and Nasdaq-100 Index 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 Funds and Nasdaq-100 Index into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rbc Funds Trust and Nasdaq 100 Index Fund, you can compare the effects of market volatilities on Rbc Funds and Nasdaq-100 Index 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 Funds with a short position of Nasdaq-100 Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbc Funds and Nasdaq-100 Index.

Diversification Opportunities for Rbc Funds and Nasdaq-100 Index

-0.52

Correlation Coefficient

Rbc Funds  Nasdaq-100 Index

Excellent diversification

The 3 months correlation between Rbc and Nasdaq-100 is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Rbc Funds Trust and Nasdaq 100 Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Index and Rbc Funds 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 Funds Trust are associated (or correlated) with Nasdaq-100 Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Index has no effect on the direction of Rbc Funds i.e., Rbc Funds and Nasdaq-100 Index go up and down completely randomly.

Pair Corralation between Rbc Funds and Nasdaq-100 Index

Assuming the 90 days horizon Rbc Funds Trust is expected to generate 0.74 times more return on investment than Nasdaq-100 Index. However, Rbc Funds Trust is 1.35 times less risky than Nasdaq-100 Index. It trades about 0.14 of its potential returns per unit of risk. Nasdaq 100 Index Fund is currently generating about -0.07 per unit of risk. If you would invest  784.00  in Rbc Funds Trust on December 28, 2024 and sell it today you would earn a total of  69.00  from holding Rbc Funds Trust or generate 8.8% return on investment over 90 days.

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

Rbc Funds Trust  vs.  Nasdaq 100 Index Fund

Rbc Funds Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rbc Funds Trust are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Rbc Funds may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nasdaq 100 Index

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq 100 Index Fund 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.

Pair Trading with Rbc Funds and Nasdaq-100 Index

The main advantage of trading using opposite Rbc Funds and Nasdaq-100 Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rbc Funds position performs unexpectedly, Nasdaq-100 Index 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 Nasdaq-100 Index will offset losses from the drop in Nasdaq-100 Index's long position.

The idea behind Rbc Funds Trust and Nasdaq 100 Index Fund 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.