Correlation Between Rbc China and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Rbc China and Aqr Large 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 Aqr Large 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 Aqr Large Cap, you can compare the effects of market volatilities on Rbc China and Aqr Large 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 Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbc China and Aqr Large.
Diversification Opportunities for Rbc China and Aqr Large
Very poor diversification
The 3 months correlation between Rbc and Aqr is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Rbc China Equity and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap 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 Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Rbc China i.e., Rbc China and Aqr Large go up and down completely randomly.
Pair Corralation between Rbc China and Aqr Large
Assuming the 90 days horizon Rbc China Equity is expected to generate 1.68 times more return on investment than Aqr Large. However, Rbc China is 1.68 times more volatile than Aqr Large Cap. It trades about 0.24 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.19 per unit of risk. If you would invest 998.00 in Rbc China Equity on June 11, 2025 and sell it today you would earn a total of 164.00 from holding Rbc China Equity or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rbc China Equity vs. Aqr Large Cap
Performance |
| Timeline |
| Rbc China Equity |
| Aqr Large Cap |
Rbc China and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rbc China and Aqr Large
The main advantage of trading using opposite Rbc China and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rbc China position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large's long position.| Rbc China vs. Dunham Porategovernment Bond | Rbc China vs. Franklin Adjustable Government | Rbc China vs. Intermediate Government Bond | Rbc China vs. Wesmark Government Bond |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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