Correlation Between Royal Bank and Storage Vault

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

Diversification Opportunities for Royal Bank and Storage Vault

0.79

Correlation Coefficient

Royal Bank  Storage Vault

Poor diversification

The 3 months correlation between Royal and Storage is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Royal Bank of and Storage Vault Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storage Vault Canada 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 Storage Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storage Vault Canada has no effect on the direction of Royal Bank i.e., Royal Bank and Storage Vault go up and down completely randomly.

Pair Corralation between Royal Bank and Storage Vault

Assuming the 90 days horizon Royal Bank of is expected to generate 0.42 times more return on investment than Storage Vault. However, Royal Bank of is 2.37 times less risky than Storage Vault. It trades about 0.29 of its potential returns per unit of risk. Storage Vault Canada is currently generating about 0.12 per unit of risk. If you would invest  15,794  in Royal Bank of on April 20, 2025 and sell it today you would earn a total of  2,420  from holding Royal Bank of or generate 15.32% return on investment over 90 days.

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

Royal Bank of  vs.  Storage Vault Canada

Royal Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Royal Bank of are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Royal Bank displayed solid returns over the last few months and may actually be approaching a breakup point.

Storage Vault Canada

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Storage Vault Canada are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Storage Vault displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Royal Bank and Storage Vault

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

The idea behind Royal Bank of and Storage Vault Canada 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.