Correlation Between TELUS International and RCM Technologies

Can any of the company-specific risk be diversified away by investing in both TELUS International and RCM Technologies 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 TELUS International and RCM Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TELUS International and RCM Technologies, you can compare the effects of market volatilities on TELUS International and RCM Technologies 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 TELUS International with a short position of RCM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of TELUS International and RCM Technologies.

Diversification Opportunities for TELUS International and RCM Technologies

0.8

Correlation Coefficient

TELUS International  RCM Technologies

Very poor diversification

The 3 months correlation between TELUS and RCM is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding TELUS International and RCM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCM Technologies and TELUS International 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 TELUS International are associated (or correlated) with RCM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCM Technologies has no effect on the direction of TELUS International i.e., TELUS International and RCM Technologies go up and down completely randomly.

Pair Corralation between TELUS International and RCM Technologies

Given the investment horizon of 90 days TELUS International is expected to generate 1.46 times more return on investment than RCM Technologies. However, TELUS International is 1.46 times more volatile than RCM Technologies. It trades about 0.21 of its potential returns per unit of risk. RCM Technologies is currently generating about 0.25 per unit of risk. If you would invest  244.00  in TELUS International on April 25, 2025 and sell it today you would earn a total of  161.00  from holding TELUS International or generate 65.98% return on investment over 90 days.

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

TELUS International  vs.  RCM Technologies

TELUS International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TELUS International are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, TELUS International unveiled solid returns over the last few months and may actually be approaching a breakup point.

RCM Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in RCM Technologies are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak primary indicators, RCM Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TELUS International and RCM Technologies

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

The idea behind TELUS International and RCM Technologies 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.