Correlation Between Royal Bank and EQB
Can any of the company-specific risk be diversified away by investing in both Royal Bank and EQB 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 EQB 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 EQB Inc, you can compare the effects of market volatilities on Royal Bank and EQB 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 EQB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Bank and EQB.
Diversification Opportunities for Royal Bank and EQB
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Royal and EQB is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Royal Bank of and EQB Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQB Inc 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 EQB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQB Inc has no effect on the direction of Royal Bank i.e., Royal Bank and EQB go up and down completely randomly.
Pair Corralation between Royal Bank and EQB
Assuming the 90 days trading horizon Royal Bank is expected to generate 7.52 times less return on investment than EQB. But when comparing it to its historical volatility, Royal Bank of is 8.18 times less risky than EQB. It trades about 0.07 of its potential returns per unit of risk. EQB Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9,169 in EQB Inc on September 6, 2025 and sell it today you would earn a total of 632.00 from holding EQB Inc or generate 6.89% 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. EQB Inc
Performance |
| Timeline |
| Royal Bank |
| EQB Inc |
Royal Bank and EQB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Bank and EQB
The main advantage of trading using opposite Royal Bank and EQB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Bank position performs unexpectedly, EQB 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 EQB will offset losses from the drop in EQB's long position.| Royal Bank vs. iA Financial | Royal Bank vs. Ramp Metals | Royal Bank vs. Precious Metals And | Royal Bank vs. Data Communications Management |
| EQB vs. Postmedia Network Canada | EQB vs. Precision Drilling | EQB vs. InPlay Oil Corp | EQB vs. Hemisphere Energy |
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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
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