Correlation Between Rbc Global and Gotham Neutral

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

Diversification Opportunities for Rbc Global and Gotham Neutral

-0.06

Correlation Coefficient

Rbc Global  Gotham Neutral

Good diversification

The 3 months correlation between Rbc and Gotham is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Rbc Global Equity and Gotham Neutral Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gotham Neutral 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 Gotham Neutral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gotham Neutral has no effect on the direction of Rbc Global i.e., Rbc Global and Gotham Neutral go up and down completely randomly.

Pair Corralation between Rbc Global and Gotham Neutral

Assuming the 90 days horizon Rbc Global Equity is expected to generate 2.68 times more return on investment than Gotham Neutral. However, Rbc Global is 2.68 times more volatile than Gotham Neutral Fund. It trades about 0.09 of its potential returns per unit of risk. Gotham Neutral Fund is currently generating about 0.13 per unit of risk. If you would invest  933.00  in Rbc Global Equity on October 12, 2024 and sell it today you would earn a total of  128.00  from holding Rbc Global Equity or generate 13.72% return on investment over 90 days.

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

Rbc Global Equity  vs.  Gotham Neutral Fund

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. In spite of fairly strong essential indicators, Rbc Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gotham Neutral

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gotham Neutral Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Gotham Neutral 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 Global and Gotham Neutral

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

The idea behind Rbc Global Equity and Gotham Neutral 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.