Correlation Between RBC Quant and Fidelity Dividend

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

By analyzing existing cross correlation between RBC Quant Dividend and Fidelity Dividend for, you can compare the effects of market volatilities on RBC Quant and Fidelity Dividend 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 Quant with a short position of Fidelity Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Quant and Fidelity Dividend.

Diversification Opportunities for RBC Quant and Fidelity Dividend

0.63

Correlation Coefficient

RBC Quant  Fidelity Dividend

Poor diversification

The 3 months correlation between RBC and Fidelity is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding RBC Quant Dividend and Fidelity Dividend for in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Dividend for and RBC Quant 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 Quant Dividend are associated (or correlated) with Fidelity Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Dividend for has no effect on the direction of RBC Quant i.e., RBC Quant and Fidelity Dividend go up and down completely randomly.

Pair Corralation between RBC Quant and Fidelity Dividend

Assuming the 90 days trading horizon RBC Quant is expected to generate 1.15 times less return on investment than Fidelity Dividend. But when comparing it to its historical volatility, RBC Quant Dividend is 1.07 times less risky than Fidelity Dividend. It trades about 0.25 of its potential returns per unit of risk. Fidelity Dividend for is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  3,935  in Fidelity Dividend for on April 23, 2025 and sell it today you would earn a total of  616.00  from holding Fidelity Dividend for or generate 15.65% return on investment over 90 days.

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

RBC Quant Dividend  vs.  Fidelity Dividend for

RBC Quant Dividend

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Quant Dividend are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, RBC Quant displayed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Dividend for

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Dividend for are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fidelity Dividend displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RBC Quant and Fidelity Dividend

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

The idea behind RBC Quant Dividend and Fidelity Dividend for 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.