Correlation Between Advanced Micro and RBC Life

Can any of the company-specific risk be diversified away by investing in both Advanced Micro and RBC Life 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 Advanced Micro and RBC Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Advanced Micro Devices and RBC Life Sciences, you can compare the effects of market volatilities on Advanced Micro and RBC Life 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 Advanced Micro with a short position of RBC Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and RBC Life.

Diversification Opportunities for Advanced Micro and RBC Life

0.79

Correlation Coefficient

Advanced Micro  RBC Life

Poor diversification

The 3 months correlation between Advanced and RBC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and RBC Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Life Sciences and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with RBC Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Life Sciences has no effect on the direction of Advanced Micro i.e., Advanced Micro and RBC Life go up and down completely randomly.

Pair Corralation between Advanced Micro and RBC Life

Assuming the 90 days trading horizon Advanced Micro is expected to generate 2.5 times less return on investment than RBC Life. But when comparing it to its historical volatility, Advanced Micro Devices is 2.73 times less risky than RBC Life. It trades about 0.14 of its potential returns per unit of risk. RBC Life Sciences is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.01  in RBC Life Sciences on August 17, 2025 and sell it today you would earn a total of  0.01  from holding RBC Life Sciences or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Advanced Micro Devices  vs.  RBC Life Sciences

Advanced Micro Devices

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental indicators, Advanced Micro displayed solid returns over the last few months and may actually be approaching a breakup point.

RBC Life Sciences

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Life Sciences are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent fundamental indicators, RBC Life disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advanced Micro and RBC Life

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

The idea behind Advanced Micro Devices and RBC Life Sciences 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 Transaction History module to view history of all your transactions and understand their impact on performance.