Correlation Between Royal Bank and High Tide
Can any of the company-specific risk be diversified away by investing in both Royal Bank and High Tide 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 High Tide 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 High Tide, you can compare the effects of market volatilities on Royal Bank and High Tide 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 High Tide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Bank and High Tide.
Diversification Opportunities for Royal Bank and High Tide
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Royal and High is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Royal Bank of and High Tide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Tide 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 High Tide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Tide has no effect on the direction of Royal Bank i.e., Royal Bank and High Tide go up and down completely randomly.
Pair Corralation between Royal Bank and High Tide
Assuming the 90 days trading horizon Royal Bank of is expected to under-perform the High Tide. But the preferred stock apears to be less risky and, when comparing its historical volatility, Royal Bank of is 8.5 times less risky than High Tide. The preferred stock trades about -0.04 of its potential returns per unit of risk. The High Tide is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 433.00 in High Tide on October 21, 2024 and sell it today you would earn a total of 15.00 from holding High Tide or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Bank of vs. High Tide
Performance |
| Timeline |
| Royal Bank |
| High Tide |
Royal Bank and High Tide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Bank and High Tide
The main advantage of trading using opposite Royal Bank and High Tide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Bank position performs unexpectedly, High Tide 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 High Tide will offset losses from the drop in High Tide's long position.| Royal Bank vs. Verizon Communications CDR | Royal Bank vs. SalesforceCom CDR | Royal Bank vs. Rogers Communications | Royal Bank vs. Maple Leaf Foods |
| High Tide vs. Braille Energy Systems | High Tide vs. Solar Alliance Energy | High Tide vs. Drone Delivery Canada | High Tide vs. iShares Canadian HYBrid |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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