Correlation Between RBC Discount and European Residential
Can any of the company-specific risk be diversified away by investing in both RBC Discount and European Residential 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 Discount and European Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RBC Discount Bond and European Residential Real, you can compare the effects of market volatilities on RBC Discount and European Residential 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 Discount with a short position of European Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Discount and European Residential.
Diversification Opportunities for RBC Discount and European Residential
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RBC and European is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding RBC Discount Bond and European Residential Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Residential Real and RBC Discount 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 Discount Bond are associated (or correlated) with European Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Residential Real has no effect on the direction of RBC Discount i.e., RBC Discount and European Residential go up and down completely randomly.
Pair Corralation between RBC Discount and European Residential
Assuming the 90 days trading horizon RBC Discount Bond is expected to generate 0.03 times more return on investment than European Residential. However, RBC Discount Bond is 33.93 times less risky than European Residential. It trades about 0.17 of its potential returns per unit of risk. European Residential Real is currently generating about -0.13 per unit of risk. If you would invest 2,173 in RBC Discount Bond on August 14, 2025 and sell it today you would earn a total of 42.00 from holding RBC Discount Bond or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Discount Bond vs. European Residential Real
Performance |
| Timeline |
| RBC Discount Bond |
| European Residential Real |
RBC Discount and European Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Discount and European Residential
The main advantage of trading using opposite RBC Discount and European Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Discount position performs unexpectedly, European Residential 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 European Residential will offset losses from the drop in European Residential's long position.| RBC Discount vs. RBC Target 2029 | RBC Discount vs. RBC Quant Dividend | RBC Discount vs. RBC Quant EAFE | RBC Discount vs. RBC Quant European |
| European Residential vs. Invesque | European Residential vs. Canadian Net Real | European Residential vs. True North Commercial | European Residential vs. Parkit Enterprise |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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