Correlation Between Rbc Funds and Small Cap

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

Diversification Opportunities for Rbc Funds and Small Cap

0.0

Correlation Coefficient

Rbc Funds  Small Cap

Pay attention - limited upside

The 3 months correlation between Rbc and Small is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rbc Funds Trust and Small Cap Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Stock 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Stock has no effect on the direction of Rbc Funds i.e., Rbc Funds and Small Cap go up and down completely randomly.

Pair Corralation between Rbc Funds and Small Cap

If you would invest  100.00  in Rbc Funds Trust on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Rbc Funds Trust or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Rbc Funds Trust  vs.  Small Cap Stock

Rbc Funds Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbc Funds Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Rbc Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Small Cap Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Small Cap Stock has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Small Cap 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 Funds and Small Cap

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

The idea behind Rbc Funds Trust and Small Cap Stock 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.