Correlation Between Royal Bank and Hamilton Insurance
Can any of the company-specific risk be diversified away by investing in both Royal Bank and Hamilton Insurance 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 Hamilton Insurance 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 Hamilton Insurance Group,, you can compare the effects of market volatilities on Royal Bank and Hamilton Insurance 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 Hamilton Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Bank and Hamilton Insurance.
Diversification Opportunities for Royal Bank and Hamilton Insurance
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Royal and Hamilton is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Royal Bank of and Hamilton Insurance Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Insurance Group, 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 Hamilton Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Insurance Group, has no effect on the direction of Royal Bank i.e., Royal Bank and Hamilton Insurance go up and down completely randomly.
Pair Corralation between Royal Bank and Hamilton Insurance
Allowing for the 90-day total investment horizon Royal Bank is expected to generate 1.48 times less return on investment than Hamilton Insurance. But when comparing it to its historical volatility, Royal Bank of is 2.03 times less risky than Hamilton Insurance. It trades about 0.07 of its potential returns per unit of risk. Hamilton Insurance Group, is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,500 in Hamilton Insurance Group, on August 30, 2024 and sell it today you would earn a total of 401.00 from holding Hamilton Insurance Group, or generate 26.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 53.54% |
| Values | Daily Returns |
Royal Bank of vs. Hamilton Insurance Group,
Performance |
| Timeline |
| Royal Bank |
| Hamilton Insurance Group, |
Royal Bank and Hamilton Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Bank and Hamilton Insurance
The main advantage of trading using opposite Royal Bank and Hamilton Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Bank position performs unexpectedly, Hamilton Insurance 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 Hamilton Insurance will offset losses from the drop in Hamilton Insurance's long position.| Royal Bank vs. Citigroup | Royal Bank vs. Wells Fargo | Royal Bank vs. Toronto Dominion Bank | Royal Bank vs. JPMorgan Chase Co |
| Hamilton Insurance vs. Lucid Group | Hamilton Insurance vs. Visteon Corp | Hamilton Insurance vs. HF Sinclair Corp | Hamilton Insurance vs. AerSale 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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