Correlation Between Canadian General and Royal Bank
Can any of the company-specific risk be diversified away by investing in both Canadian General and Royal Bank 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 Canadian General and Royal Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian General Investments and Royal Bank of, you can compare the effects of market volatilities on Canadian General and Royal Bank 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 Canadian General with a short position of Royal Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Royal Bank.
Diversification Opportunities for Canadian General and Royal Bank
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canadian and Royal is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Royal Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Bank and Canadian General 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 Canadian General Investments are associated (or correlated) with Royal Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Bank has no effect on the direction of Canadian General i.e., Canadian General and Royal Bank go up and down completely randomly.
Pair Corralation between Canadian General and Royal Bank
Assuming the 90 days trading horizon Canadian General is expected to generate 1.31 times less return on investment than Royal Bank. In addition to that, Canadian General is 3.9 times more volatile than Royal Bank of. It trades about 0.06 of its total potential returns per unit of risk. Royal Bank of is currently generating about 0.28 per unit of volatility. If you would invest 2,411 in Royal Bank of on September 12, 2024 and sell it today you would earn a total of 34.00 from holding Royal Bank of or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. Royal Bank of
Performance |
| Timeline |
| Canadian General Inv |
| Royal Bank |
Canadian General and Royal Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Royal Bank
The main advantage of trading using opposite Canadian General and Royal Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Royal Bank 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 Royal Bank will offset losses from the drop in Royal Bank's long position.| Canadian General vs. Brompton Lifeco Split | Canadian General vs. North American Financial | Canadian General vs. Prime Dividend Corp | Canadian General vs. Financial 15 Split |
| Royal Bank vs. Data Communications Management | Royal Bank vs. Canadian General Investments | Royal Bank vs. Upstart Investments | Royal Bank vs. Metalero Mining Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |