Correlation Between Fulcrum Diversified and Rbc China

Can any of the company-specific risk be diversified away by investing in both Fulcrum Diversified and Rbc China 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 Fulcrum Diversified and Rbc China into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fulcrum Diversified Absolute and Rbc China Equity, you can compare the effects of market volatilities on Fulcrum Diversified and Rbc China 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 Fulcrum Diversified with a short position of Rbc China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulcrum Diversified and Rbc China.

Diversification Opportunities for Fulcrum Diversified and Rbc China

0.24

Correlation Coefficient

Fulcrum Diversified  Rbc China

Modest diversification

The 3 months correlation between Fulcrum and Rbc is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Diversified Absolute and Rbc China Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc China Equity and Fulcrum Diversified 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 Fulcrum Diversified Absolute are associated (or correlated) with Rbc China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc China Equity has no effect on the direction of Fulcrum Diversified i.e., Fulcrum Diversified and Rbc China go up and down completely randomly.

Pair Corralation between Fulcrum Diversified and Rbc China

Assuming the 90 days horizon Fulcrum Diversified Absolute is expected to under-perform the Rbc China. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fulcrum Diversified Absolute is 1.34 times less risky than Rbc China. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Rbc China Equity is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,214  in Rbc China Equity on September 12, 2025 and sell it today you would earn a total of  57.00  from holding Rbc China Equity or generate 4.7% return on investment over 90 days.

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

Fulcrum Diversified Absolute  vs.  Rbc China Equity

Fulcrum Diversified

Risk-Adjusted Performance

Weakest

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

Rbc China Equity

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Rbc China Equity are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Rbc China is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fulcrum Diversified and Rbc China

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

The idea behind Fulcrum Diversified Absolute and Rbc China Equity 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 Global Correlations module to find global opportunities by holding instruments from different markets.