Correlation Between Royal Bank and Nickel Creek
Can any of the company-specific risk be diversified away by investing in both Royal Bank and Nickel Creek 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 Royal Bank and Nickel Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Bank of and Nickel Creek Platinum, you can compare the effects of market volatilities on Royal Bank and Nickel Creek 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 Royal Bank with a short position of Nickel Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Bank and Nickel Creek.
Diversification Opportunities for Royal Bank and Nickel Creek
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Royal and Nickel is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Royal Bank of and Nickel Creek Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Creek Platinum and Royal Bank 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 Royal Bank of are associated (or correlated) with Nickel Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Creek Platinum has no effect on the direction of Royal Bank i.e., Royal Bank and Nickel Creek go up and down completely randomly.
Pair Corralation between Royal Bank and Nickel Creek
Assuming the 90 days trading horizon Royal Bank is expected to generate 31.68 times less return on investment than Nickel Creek. But when comparing it to its historical volatility, Royal Bank of is 31.98 times less risky than Nickel Creek. It trades about 0.06 of its potential returns per unit of risk. Nickel Creek Platinum is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Nickel Creek Platinum on August 24, 2024 and sell it today you would lose (116.00) from holding Nickel Creek Platinum or give up 58.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Bank of vs. Nickel Creek Platinum
Performance |
| Timeline |
| Royal Bank |
| Nickel Creek Platinum |
Royal Bank and Nickel Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Bank and Nickel Creek
The main advantage of trading using opposite Royal Bank and Nickel Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Bank position performs unexpectedly, Nickel Creek 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 Nickel Creek will offset losses from the drop in Nickel Creek's long position.| Royal Bank vs. Brookfield Infrastructure Partners | Royal Bank vs. Forstrong Global Income | Royal Bank vs. BMO Aggregate Bond | Royal Bank vs. iShares Canadian HYBrid |
| Nickel Creek vs. Fairfax Financial Holdings | Nickel Creek vs. US Financial 15 | Nickel Creek vs. Aurora Solar Technologies | Nickel Creek vs. Solar Alliance Energy |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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