Correlation Between Rbc China and Federated Ultrashort
Can any of the company-specific risk be diversified away by investing in both Rbc China and Federated Ultrashort 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 Federated Ultrashort 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 Federated Ultrashort Bond, you can compare the effects of market volatilities on Rbc China and Federated Ultrashort 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 Federated Ultrashort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbc China and Federated Ultrashort.
Diversification Opportunities for Rbc China and Federated Ultrashort
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rbc and Federated is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Rbc China Equity and Federated Ultrashort Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Ultrashort Bond 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 Federated Ultrashort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Ultrashort Bond has no effect on the direction of Rbc China i.e., Rbc China and Federated Ultrashort go up and down completely randomly.
Pair Corralation between Rbc China and Federated Ultrashort
Assuming the 90 days horizon Rbc China Equity is expected to generate 11.06 times more return on investment than Federated Ultrashort. However, Rbc China is 11.06 times more volatile than Federated Ultrashort Bond. It trades about 0.26 of its potential returns per unit of risk. Federated Ultrashort Bond is currently generating about 0.23 per unit of risk. If you would invest 983.00 in Rbc China Equity on June 6, 2025 and sell it today you would earn a total of 172.00 from holding Rbc China Equity or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rbc China Equity vs. Federated Ultrashort Bond
Performance |
| Timeline |
| Rbc China Equity |
| Federated Ultrashort Bond |
Rbc China and Federated Ultrashort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rbc China and Federated Ultrashort
The main advantage of trading using opposite Rbc China and Federated Ultrashort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rbc China position performs unexpectedly, Federated Ultrashort 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 Federated Ultrashort will offset losses from the drop in Federated Ultrashort's long position.| Rbc China vs. Prudential Government Money | Rbc China vs. Dws Government Money | Rbc China vs. Aig Government Money | Rbc China vs. John Hancock Money |
| Federated Ultrashort vs. Federated Emerging Market | Federated Ultrashort vs. Federated Mdt All | Federated Ultrashort vs. Federated Mdt Balanced | Federated Ultrashort vs. Federated Global Allocation |
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 CEOs Directory module to screen CEOs from public companies around the world.
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