Correlation Between Strix Group and Royal Bank

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

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

Diversification Opportunities for Strix Group and Royal Bank

-0.33

Correlation Coefficient

Strix Group  Royal Bank

Very good diversification

The 3 months correlation between Strix and Royal is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Strix Group Plc and Royal Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Bank and Strix Group 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 Strix Group Plc 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 Strix Group i.e., Strix Group and Royal Bank go up and down completely randomly.

Pair Corralation between Strix Group and Royal Bank

Assuming the 90 days horizon Strix Group Plc is expected to generate 1.77 times more return on investment than Royal Bank. However, Strix Group is 1.77 times more volatile than Royal Bank of. It trades about 0.01 of its potential returns per unit of risk. Royal Bank of is currently generating about -0.09 per unit of risk. If you would invest  56.00  in Strix Group Plc on December 25, 2024 and sell it today you would earn a total of  0.00  from holding Strix Group Plc or generate 0.0% return on investment over 90 days.

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

Strix Group Plc  vs.  Royal Bank of

Strix Group Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Strix Group Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Strix Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Royal Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Royal Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Strix Group and Royal Bank

The main advantage of trading using opposite Strix Group and Royal Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strix Group 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 Strix Group Plc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.