Correlation Between Royal Bank and Lite Access

Can any of the company-specific risk be diversified away by investing in both Royal Bank and Lite Access 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 Lite Access 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 Lite Access Technologies, you can compare the effects of market volatilities on Royal Bank and Lite Access 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 Lite Access. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Bank and Lite Access.

Diversification Opportunities for Royal Bank and Lite Access

0.0

Correlation Coefficient

Royal Bank  Lite Access

Pay attention - limited upside

The 3 months correlation between Royal and Lite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Royal Bank of and Lite Access Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lite Access Technologies 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 Lite Access. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lite Access Technologies has no effect on the direction of Royal Bank i.e., Royal Bank and Lite Access go up and down completely randomly.

Pair Corralation between Royal Bank and Lite Access

If you would invest  2,260  in Royal Bank of on September 22, 2024 and sell it today you would earn a total of  214.00  from holding Royal Bank of or generate 9.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Royal Bank of  vs.  Lite Access Technologies

Royal Bank

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Royal Bank of are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Royal Bank is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Lite Access Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Royal Bank and Lite Access

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

The idea behind Royal Bank of and Lite Access Technologies 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.