Correlation Between Rbc China and First Investors

Can any of the company-specific risk be diversified away by investing in both Rbc China and First Investors 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 First Investors 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 First Investors Select, you can compare the effects of market volatilities on Rbc China and First Investors 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 First Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbc China and First Investors.

Diversification Opportunities for Rbc China and First Investors

0.93

Correlation Coefficient

Rbc China  First Investors

Almost no diversification

The 3 months correlation between Rbc and First is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Rbc China Equity and First Investors Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Investors Select 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 First Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Investors Select has no effect on the direction of Rbc China i.e., Rbc China and First Investors go up and down completely randomly.

Pair Corralation between Rbc China and First Investors

Assuming the 90 days horizon Rbc China Equity is expected to generate 1.93 times more return on investment than First Investors. However, Rbc China is 1.93 times more volatile than First Investors Select. It trades about 0.19 of its potential returns per unit of risk. First Investors Select is currently generating about 0.14 per unit of risk. If you would invest  1,103  in Rbc China Equity on August 13, 2025 and sell it today you would earn a total of  193.00  from holding Rbc China Equity or generate 17.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Rbc China Equity  vs.  First Investors Select

Rbc China Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rbc China Equity are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Rbc China showed solid returns over the last few months and may actually be approaching a breakup point.

First Investors Select

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Investors Select are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, First Investors may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Rbc China and First Investors

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

The idea behind Rbc China Equity and First Investors Select 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.