Correlation Between Royal Bank and Innergex Renewable
Can any of the company-specific risk be diversified away by investing in both Royal Bank and Innergex Renewable 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 Innergex Renewable 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 Innergex Renewable Energy, you can compare the effects of market volatilities on Royal Bank and Innergex Renewable 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 Innergex Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Bank and Innergex Renewable.
Diversification Opportunities for Royal Bank and Innergex Renewable
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Royal and Innergex is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Royal Bank of and Innergex Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innergex Renewable Energy 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 Innergex Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innergex Renewable Energy has no effect on the direction of Royal Bank i.e., Royal Bank and Innergex Renewable go up and down completely randomly.
Pair Corralation between Royal Bank and Innergex Renewable
Assuming the 90 days trading horizon Royal Bank of is expected to generate 0.22 times more return on investment than Innergex Renewable. However, Royal Bank of is 4.64 times less risky than Innergex Renewable. It trades about 0.16 of its potential returns per unit of risk. Innergex Renewable Energy is currently generating about -0.22 per unit of risk. If you would invest 2,531 in Royal Bank of on August 28, 2024 and sell it today you would earn a total of 35.00 from holding Royal Bank of or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Bank of vs. Innergex Renewable Energy
Performance |
| Timeline |
| Royal Bank |
| Innergex Renewable Energy |
Royal Bank and Innergex Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Bank and Innergex Renewable
The main advantage of trading using opposite Royal Bank and Innergex Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Bank position performs unexpectedly, Innergex Renewable 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 Innergex Renewable will offset losses from the drop in Innergex Renewable's long position.| Royal Bank vs. Forstrong Global Income | Royal Bank vs. BMO Aggregate Bond | Royal Bank vs. Terreno Resources Corp | Royal Bank vs. iShares Canadian HYBrid |
| Innergex Renewable vs. Boralex | Innergex Renewable vs. Capital Power | Innergex Renewable vs. Brookfield Renewable Partners |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |