Correlation Between Rbc Bluebay and Small Cap

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

By analyzing existing cross correlation between Rbc Bluebay Emerging and Small Cap Special, you can compare the effects of market volatilities on Rbc Bluebay and Small Cap 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 Bluebay with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbc Bluebay and Small Cap.

Diversification Opportunities for Rbc Bluebay and Small Cap

-0.49

Correlation Coefficient

Rbc Bluebay  Small Cap

Very good diversification

The 3 months correlation between Rbc and Small is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Rbc Bluebay Emerging and Small Cap Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Special and Rbc Bluebay 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 Bluebay Emerging are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Special has no effect on the direction of Rbc Bluebay i.e., Rbc Bluebay and Small Cap go up and down completely randomly.

Pair Corralation between Rbc Bluebay and Small Cap

Assuming the 90 days horizon Rbc Bluebay Emerging is expected to generate 0.19 times more return on investment than Small Cap. However, Rbc Bluebay Emerging is 5.21 times less risky than Small Cap. It trades about 0.26 of its potential returns per unit of risk. Small Cap Special is currently generating about -0.03 per unit of risk. If you would invest  866.00  in Rbc Bluebay Emerging on September 8, 2025 and sell it today you would earn a total of  30.00  from holding Rbc Bluebay Emerging or generate 3.46% return on investment over 90 days.

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

Rbc Bluebay Emerging  vs.  Small Cap Special

Rbc Bluebay Emerging

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rbc Bluebay Emerging are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Rbc Bluebay is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Small Cap Special

Risk-Adjusted Performance

Weakest

Over the last 90 days Small Cap Special has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Small Cap 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 Bluebay and Small Cap

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

The idea behind Rbc Bluebay Emerging and Small Cap Special 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.