Correlation Between Royal Bank and Unum

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

Diversification Opportunities for Royal Bank and Unum

0.06

Correlation Coefficient

Royal Bank  Unum

Significant diversification

The 3 months correlation between Royal and Unum is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Royal Bank of and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group 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 Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of Royal Bank i.e., Royal Bank and Unum go up and down completely randomly.

Pair Corralation between Royal Bank and Unum

Allowing for the 90-day total investment horizon Royal Bank of is expected to generate 0.41 times more return on investment than Unum. However, Royal Bank of is 2.42 times less risky than Unum. It trades about 0.14 of its potential returns per unit of risk. Unum Group is currently generating about -0.08 per unit of risk. If you would invest  11,996  in Royal Bank of on May 5, 2025 and sell it today you would earn a total of  865.00  from holding Royal Bank of or generate 7.21% return on investment over 90 days.

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

Royal Bank of  vs.  Unum Group

Royal Bank

Risk-Adjusted Performance

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 fairly unfluctuating basic indicators, Royal Bank may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Unum Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Unum Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Royal Bank and Unum

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

The idea behind Royal Bank of and Unum Group 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..