Correlation Between RBC Discount and Guardian
Can any of the company-specific risk be diversified away by investing in both RBC Discount and Guardian 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 Discount and Guardian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RBC Discount Bond and Guardian i3 Global, you can compare the effects of market volatilities on RBC Discount and Guardian 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 Discount with a short position of Guardian. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Discount and Guardian.
Diversification Opportunities for RBC Discount and Guardian
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RBC and Guardian is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding RBC Discount Bond and Guardian i3 Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian i3 Global and RBC Discount 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 Discount Bond are associated (or correlated) with Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian i3 Global has no effect on the direction of RBC Discount i.e., RBC Discount and Guardian go up and down completely randomly.
Pair Corralation between RBC Discount and Guardian
Assuming the 90 days trading horizon RBC Discount Bond is expected to generate 0.35 times more return on investment than Guardian. However, RBC Discount Bond is 2.83 times less risky than Guardian. It trades about 0.03 of its potential returns per unit of risk. Guardian i3 Global is currently generating about -0.08 per unit of risk. If you would invest 2,194 in RBC Discount Bond on December 28, 2024 and sell it today you would earn a total of 18.00 from holding RBC Discount Bond or generate 0.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
RBC Discount Bond vs. Guardian i3 Global
Performance |
Timeline |
RBC Discount Bond |
Guardian i3 Global |
RBC Discount and Guardian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RBC Discount and Guardian
The main advantage of trading using opposite RBC Discount and Guardian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Discount position performs unexpectedly, Guardian 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 Guardian will offset losses from the drop in Guardian's long position.RBC Discount vs. RBC Target 2029 | RBC Discount vs. RBC Quant Dividend | RBC Discount vs. RBC Quant EAFE | RBC Discount vs. RBC Quant European |
Guardian vs. Guardian i3 Quality | Guardian vs. Guardian Directed Premium | Guardian vs. Guardian Directed Equity | Guardian vs. CI ONE Global |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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