Correlation Between Getty Images and Royal Bank

Can any of the company-specific risk be diversified away by investing in both Getty Images and Royal Bank 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 Getty Images and Royal Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Getty Images Holdings and Royal Bank of, you can compare the effects of market volatilities on Getty Images and Royal Bank 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 Getty Images with a short position of Royal Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Royal Bank.

Diversification Opportunities for Getty Images and Royal Bank

0.36

Correlation Coefficient

Getty Images  Royal Bank

Weak diversification

The 3 months correlation between Getty and Royal is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Royal Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Bank and Getty Images 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 Getty Images Holdings are associated (or correlated) with Royal Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Bank has no effect on the direction of Getty Images i.e., Getty Images and Royal Bank go up and down completely randomly.

Pair Corralation between Getty Images and Royal Bank

Given the investment horizon of 90 days Getty Images Holdings is expected to generate 11.11 times more return on investment than Royal Bank. However, Getty Images is 11.11 times more volatile than Royal Bank of. It trades about 0.17 of its potential returns per unit of risk. Royal Bank of is currently generating about -0.01 per unit of risk. If you would invest  223.00  in Getty Images Holdings on October 23, 2024 and sell it today you would earn a total of  52.00  from holding Getty Images Holdings or generate 23.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Getty Images Holdings  vs.  Royal Bank of

Getty Images Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Images Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Royal Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Royal Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Royal Bank is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Getty Images and Royal Bank

The main advantage of trading using opposite Getty Images and Royal Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images position performs unexpectedly, Royal Bank 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 Royal Bank will offset losses from the drop in Royal Bank's long position.

The idea behind Getty Images Holdings and Royal Bank of pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.