Correlation Between Rbc China and Intermediate Bond

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

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

Diversification Opportunities for Rbc China and Intermediate Bond

0.0

Correlation Coefficient

Rbc China  Intermediate Bond

Pay attention - limited upside

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

Pair Corralation between Rbc China and Intermediate Bond

If you would invest  851.00  in Rbc China Equity on February 3, 2025 and sell it today you would earn a total of  74.00  from holding Rbc China Equity or generate 8.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Rbc China Equity  vs.  Intermediate Bond Fund

Rbc China Equity

Risk-Adjusted Performance

Insignificant

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 weak forward indicators, Rbc China may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Intermediate Bond

Risk-Adjusted Performance

OK

Over the last 90 days Intermediate Bond Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Intermediate Bond 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 China and Intermediate Bond

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

The idea behind Rbc China Equity and Intermediate Bond Fund 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.