Correlation Between Brompton North and RBC Quant
Can any of the company-specific risk be diversified away by investing in both Brompton North and RBC Quant 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 Brompton North and RBC Quant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton North American and RBC Quant European, you can compare the effects of market volatilities on Brompton North and RBC Quant 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 Brompton North with a short position of RBC Quant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton North and RBC Quant.
Diversification Opportunities for Brompton North and RBC Quant
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brompton and RBC is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Brompton North American and RBC Quant European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Quant European and Brompton North 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 Brompton North American are associated (or correlated) with RBC Quant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Quant European has no effect on the direction of Brompton North i.e., Brompton North and RBC Quant go up and down completely randomly.
Pair Corralation between Brompton North and RBC Quant
Assuming the 90 days trading horizon Brompton North is expected to generate 1.86 times less return on investment than RBC Quant. But when comparing it to its historical volatility, Brompton North American is 1.26 times less risky than RBC Quant. It trades about 0.25 of its potential returns per unit of risk. RBC Quant European is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 3,093 in RBC Quant European on November 18, 2025 and sell it today you would earn a total of 417.00 from holding RBC Quant European or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brompton North American vs. RBC Quant European
Performance |
| Timeline |
| Brompton North American |
| RBC Quant European |
Brompton North and RBC Quant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton North and RBC Quant
The main advantage of trading using opposite Brompton North and RBC Quant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton North position performs unexpectedly, RBC Quant 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 Quant will offset losses from the drop in RBC Quant's long position.| Brompton North vs. Wealthsimple Developed Markets | Brompton North vs. Hamilton Utilities YIELD | Brompton North vs. Vanguard Dividend Appreciation | Brompton North vs. Invesco Canadian Dividend |
| RBC Quant vs. iShares MSCI Min | RBC Quant vs. iShares MSCI USA | RBC Quant vs. Brompton Global Healthcare | RBC Quant vs. Mackenzie International Equity |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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