Correlation Between Federated Bond and Rbc Funds

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

By analyzing existing cross correlation between Federated Bond Fund and Rbc Funds Trust, you can compare the effects of market volatilities on Federated Bond and Rbc Funds 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 Federated Bond with a short position of Rbc Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Bond and Rbc Funds.

Diversification Opportunities for Federated Bond and Rbc Funds

0.34

Correlation Coefficient

Federated Bond  Rbc Funds

Weak diversification

The 3 months correlation between Federated and Rbc is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Federated Bond Fund and Rbc Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Funds Trust and Federated Bond 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 Federated Bond Fund are associated (or correlated) with Rbc Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Funds Trust has no effect on the direction of Federated Bond i.e., Federated Bond and Rbc Funds go up and down completely randomly.

Pair Corralation between Federated Bond and Rbc Funds

Assuming the 90 days horizon Federated Bond Fund is expected to generate 2.62 times more return on investment than Rbc Funds. However, Federated Bond is 2.62 times more volatile than Rbc Funds Trust. It trades about 0.08 of its potential returns per unit of risk. Rbc Funds Trust is currently generating about 0.13 per unit of risk. If you would invest  829.00  in Federated Bond Fund on April 3, 2025 and sell it today you would earn a total of  13.00  from holding Federated Bond Fund or generate 1.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Federated Bond Fund  vs.  Rbc Funds Trust

Federated Bond

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Bond Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Federated Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rbc Funds Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rbc Funds Trust are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. 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.

Pair Trading with Federated Bond and Rbc Funds

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

The idea behind Federated Bond Fund and Rbc Funds Trust 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.