Correlation Between Hamilton Canadian and RBC Canadian
Can any of the company-specific risk be diversified away by investing in both Hamilton Canadian and RBC Canadian 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 Hamilton Canadian and RBC Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamilton Canadian Bank and RBC Canadian Bank, you can compare the effects of market volatilities on Hamilton Canadian and RBC Canadian 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 Hamilton Canadian with a short position of RBC Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Canadian and RBC Canadian.
Diversification Opportunities for Hamilton Canadian and RBC Canadian
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Hamilton and RBC is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Canadian Bank and RBC Canadian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Canadian Bank and Hamilton Canadian 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 Hamilton Canadian Bank are associated (or correlated) with RBC Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Canadian Bank has no effect on the direction of Hamilton Canadian i.e., Hamilton Canadian and RBC Canadian go up and down completely randomly.
Pair Corralation between Hamilton Canadian and RBC Canadian
Assuming the 90 days trading horizon Hamilton Canadian is expected to generate 1.16 times less return on investment than RBC Canadian. In addition to that, Hamilton Canadian is 1.08 times more volatile than RBC Canadian Bank. It trades about 0.2 of its total potential returns per unit of risk. RBC Canadian Bank is currently generating about 0.25 per unit of volatility. If you would invest 2,352 in RBC Canadian Bank on September 1, 2024 and sell it today you would earn a total of 504.00 from holding RBC Canadian Bank or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Hamilton Canadian Bank vs. RBC Canadian Bank
Performance |
| Timeline |
| Hamilton Canadian Bank |
| RBC Canadian Bank |
Hamilton Canadian and RBC Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamilton Canadian and RBC Canadian
The main advantage of trading using opposite Hamilton Canadian and RBC Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Canadian position performs unexpectedly, RBC Canadian 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 RBC Canadian will offset losses from the drop in RBC Canadian's long position.| Hamilton Canadian vs. Hamilton Enhanced Canadian | Hamilton Canadian vs. Hamilton Enhanced Canadian | Hamilton Canadian vs. Hamilton Australian Bank | Hamilton Canadian vs. Hamilton Global Financials |
| RBC Canadian vs. BMO Canadian Dividend | RBC Canadian vs. BMO Covered Call | RBC Canadian vs. BMO Canadian High | RBC Canadian vs. BMO NASDAQ 100 |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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