Correlation Between RBC Banks and Global X

Can any of the company-specific risk be diversified away by investing in both RBC Banks and Global X 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 Banks and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RBC Banks Yield and Global X Artificial, you can compare the effects of market volatilities on RBC Banks and Global X 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 Banks with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Banks and Global X.

Diversification Opportunities for RBC Banks and Global X

0.94

Correlation Coefficient

RBC Banks  Global X

Almost no diversification

The 3 months correlation between RBC and Global is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding RBC Banks Yield and Global X Artificial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Artificial and RBC Banks 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 Banks Yield are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Artificial has no effect on the direction of RBC Banks i.e., RBC Banks and Global X go up and down completely randomly.

Pair Corralation between RBC Banks and Global X

Assuming the 90 days trading horizon RBC Banks is expected to generate 1.53 times less return on investment than Global X. But when comparing it to its historical volatility, RBC Banks Yield is 1.02 times less risky than Global X. It trades about 0.21 of its potential returns per unit of risk. Global X Artificial is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  3,352  in Global X Artificial on April 25, 2025 and sell it today you would earn a total of  1,164  from holding Global X Artificial or generate 34.73% return on investment over 90 days.

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

RBC Banks Yield  vs.  Global X Artificial

RBC Banks Yield

Risk-Adjusted Performance

Good

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

Global X Artificial

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Artificial are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Global X displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RBC Banks and Global X

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

The idea behind RBC Banks Yield and Global X Artificial 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.