Correlation Between IShares Dividend and RBC Quant

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

By analyzing existing cross correlation between iShares Dividend Growers and RBC Quant Dividend, you can compare the effects of market volatilities on IShares Dividend and RBC Quant 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 IShares Dividend with a short position of RBC Quant. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Dividend and RBC Quant.

Diversification Opportunities for IShares Dividend and RBC Quant

0.72

Correlation Coefficient

IShares Dividend  RBC Quant

Poor diversification

The 3 months correlation between IShares and RBC is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding iShares Dividend Growers and RBC Quant Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Quant Dividend and IShares Dividend 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 iShares Dividend Growers are associated (or correlated) with RBC Quant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Quant Dividend has no effect on the direction of IShares Dividend i.e., IShares Dividend and RBC Quant go up and down completely randomly.

Pair Corralation between IShares Dividend and RBC Quant

Assuming the 90 days trading horizon IShares Dividend is expected to generate 2.56 times less return on investment than RBC Quant. But when comparing it to its historical volatility, iShares Dividend Growers is 1.12 times less risky than RBC Quant. It trades about 0.07 of its potential returns per unit of risk. RBC Quant Dividend is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,292  in RBC Quant Dividend on May 4, 2025 and sell it today you would earn a total of  226.00  from holding RBC Quant Dividend or generate 9.86% return on investment over 90 days.

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

iShares Dividend Growers  vs.  RBC Quant Dividend

iShares Dividend Growers

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Dividend Growers are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, IShares Dividend is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

RBC Quant Dividend

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Quant Dividend are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, RBC Quant may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with IShares Dividend and RBC Quant

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

The idea behind iShares Dividend Growers and RBC Quant Dividend 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.