Correlation Between SANOK RUBBER and Dollarama
Can any of the company-specific risk be diversified away by investing in both SANOK RUBBER and Dollarama 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 SANOK RUBBER and Dollarama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANOK RUBBER ZY and Dollarama, you can compare the effects of market volatilities on SANOK RUBBER and Dollarama 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 SANOK RUBBER with a short position of Dollarama. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOK RUBBER and Dollarama.
Diversification Opportunities for SANOK RUBBER and Dollarama
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SANOK and Dollarama is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY and Dollarama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollarama and SANOK RUBBER 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 SANOK RUBBER ZY are associated (or correlated) with Dollarama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollarama has no effect on the direction of SANOK RUBBER i.e., SANOK RUBBER and Dollarama go up and down completely randomly.
Pair Corralation between SANOK RUBBER and Dollarama
Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 2.14 times more return on investment than Dollarama. However, SANOK RUBBER is 2.14 times more volatile than Dollarama. It trades about 0.09 of its potential returns per unit of risk. Dollarama is currently generating about 0.09 per unit of risk. If you would invest 155.00 in SANOK RUBBER ZY on September 12, 2024 and sell it today you would earn a total of 285.00 from holding SANOK RUBBER ZY or generate 183.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANOK RUBBER ZY vs. Dollarama
Performance |
| Timeline |
| SANOK RUBBER ZY |
| Dollarama |
SANOK RUBBER and Dollarama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANOK RUBBER and Dollarama
The main advantage of trading using opposite SANOK RUBBER and Dollarama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOK RUBBER position performs unexpectedly, Dollarama 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 Dollarama will offset losses from the drop in Dollarama's long position.| SANOK RUBBER vs. Bridgestone | SANOK RUBBER vs. Superior Plus Corp | SANOK RUBBER vs. SIVERS SEMICONDUCTORS AB | SANOK RUBBER vs. Norsk Hydro ASA |
| Dollarama vs. CAL MAINE FOODS | Dollarama vs. RETAIL FOOD GROUP | Dollarama vs. PICKN PAY STORES | Dollarama vs. National Beverage Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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